Verified answer

Blair Witch Project, although the best i've seen by a long way was made two years before and called The McPherson Tape, then remade into Alien Abduction: Incident in Lake County. It was about a family who spend thanksgiving in the remote forest up near the great lakes and there is a power cut. a series of events leads to three of the family to discover a landed UFO, but they are seen by the occupants (the 'greys' of UFO lore, played by kids in suits - no CGI crap here) and retreat to the house to show the footage to the others, then it gets really creepy as the aliens find the house and try to get in, with some real 'face at the window' chills. If the last half hour of Signs was done on a budget and with found footage, but without the water crap, it would be similar. There are several monents like the scene from Signs were an alien is caught on camera during a kid's party, but that was CGI. This is filmed properly.

All of the recent 'Found Footage' efforts like Paranormal Activity, Cloverfield and The Fourth Kind are laughable and over-the-top compared to this cheaply made but eerie little film.

Found footage genre is the name of the genre that fits Paranormal Activity and REC. There are a few famous ones like Cloverfield and Blair Witch Project.

Some are in the same genre but are indie, such as Grave Encounters, Atrocious, Deserted House, and Apollo 18.

devil inside

cloverfield

Try Cloverfeild, and Quarintine. Both are fillmed like that.