Foreclosure Scams And What To Beware Of
I guess every real estate writer has at one time or another written a story about short sale and foreclosure scams.
Well, I gotta put my two-cents worth in on these crooked dealings as well.
Did you know that one out of every 139 homes in America got hit by a foreclosure filing in the third quarter of this year, or so says RealtyTrac. 102,134 homes were actually repossessed in September.
With that many foreclosures, it is no surprise that the scavengers are out there sniffing for blood. Mostly, what these vultures do is try to convince unsuspecting homeowners into paying them in advance for advice which they say will save you from foreclosure, or they tell you that for a fee they will intervene with your lender on your behalf.
Investor's Business Daily has just published an article carrying the six danger signs homeowners should be on the lookout for if they are in danger of foreclosure. Here's a synopsis ...
1. Advance Fees. You are contacted by a person or firm who indicates that he will contact your lender and arrange for your loan to be modified, refinanced or reinstated in some way. Their only condition is that you pay them a fee in advance. Beware! Most likely they will take your money and never contact your mortgage company. Just say "no" to such proposals.
2. Counseling For A Fee. This scam involves the homeowner paying a fee in advance for advice they can get for free from their lender or from some other source, like HUD.
3. Guarantees Of Help. If somebody "guarantees" that they can halt your foreclosure, they are probably crooked. Run, repeat, run away. Any kind of negotiations about halting a foreclosure must be between the mortgage company and the lender, not some third party. There are usually some upfront fees involved in this scam as well.
4. The Leaseback Scheme. This is a beauty of a scam. The crook convinces you to sign the title to your home over to him. He says he can get a lower mortgage rate than you have. Once he has title to your house, he'll lease it back to you for less than your current monthly mortgage. Eventually, he'll let you buy it back from him. You don't believe that, do you? What is more likely to happen is that the scam artist will never sell the house back to the original home owner, and will eventually evict the homeowner. Don't fall for this scam.
5. The Bankruptcy Strategy. For an advance fee, the scam artist tells you he can save you from foreclosure through bankruptcy. Baloney. Bankruptcy only stops foreclosure for a short period of time, but it will put a black mark on your credit record for years.
6. Fake Government ID. Be on the lookout for crooks offering help as part of the federal government. Anybody with a laptop and inkjet printer can make some official-looking business cards and ID's. Before you start taking advice from such a person, call his agency and see if he really is an employee. Or, check with your lender to see if this person is on the up-and-up. Anybody can put the words "Federal" or "TARP" on a business card.
Well, there it is. Six good things to be looking out for if you are facing foreclosure. And a tip-of-the-hat to Paul Katzeff of Investor's Business Daily for writing such good info.
-30-
Well, I gotta put my two-cents worth in on these crooked dealings as well.
Did you know that one out of every 139 homes in America got hit by a foreclosure filing in the third quarter of this year, or so says RealtyTrac. 102,134 homes were actually repossessed in September.
With that many foreclosures, it is no surprise that the scavengers are out there sniffing for blood. Mostly, what these vultures do is try to convince unsuspecting homeowners into paying them in advance for advice which they say will save you from foreclosure, or they tell you that for a fee they will intervene with your lender on your behalf.
Investor's Business Daily has just published an article carrying the six danger signs homeowners should be on the lookout for if they are in danger of foreclosure. Here's a synopsis ...
1. Advance Fees. You are contacted by a person or firm who indicates that he will contact your lender and arrange for your loan to be modified, refinanced or reinstated in some way. Their only condition is that you pay them a fee in advance. Beware! Most likely they will take your money and never contact your mortgage company. Just say "no" to such proposals.
2. Counseling For A Fee. This scam involves the homeowner paying a fee in advance for advice they can get for free from their lender or from some other source, like HUD.
3. Guarantees Of Help. If somebody "guarantees" that they can halt your foreclosure, they are probably crooked. Run, repeat, run away. Any kind of negotiations about halting a foreclosure must be between the mortgage company and the lender, not some third party. There are usually some upfront fees involved in this scam as well.
4. The Leaseback Scheme. This is a beauty of a scam. The crook convinces you to sign the title to your home over to him. He says he can get a lower mortgage rate than you have. Once he has title to your house, he'll lease it back to you for less than your current monthly mortgage. Eventually, he'll let you buy it back from him. You don't believe that, do you? What is more likely to happen is that the scam artist will never sell the house back to the original home owner, and will eventually evict the homeowner. Don't fall for this scam.
5. The Bankruptcy Strategy. For an advance fee, the scam artist tells you he can save you from foreclosure through bankruptcy. Baloney. Bankruptcy only stops foreclosure for a short period of time, but it will put a black mark on your credit record for years.
6. Fake Government ID. Be on the lookout for crooks offering help as part of the federal government. Anybody with a laptop and inkjet printer can make some official-looking business cards and ID's. Before you start taking advice from such a person, call his agency and see if he really is an employee. Or, check with your lender to see if this person is on the up-and-up. Anybody can put the words "Federal" or "TARP" on a business card.
Well, there it is. Six good things to be looking out for if you are facing foreclosure. And a tip-of-the-hat to Paul Katzeff of Investor's Business Daily for writing such good info.
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posted by Terry Ward at 5:10 AM
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