Scams And Alerts
Scam artists follow the headlines, and know there are homeowners falling behind in their mortgage payments or at risk for foreclosure. Their pitches may sound like a way for you to get out from under, but their intentions are as far away from honorable as they can be. They mean to take your money. Among the predatory scams that have been reported are:
The foreclosure prevention specialist: The "specialist" really is a phony counselor who is typically unlicensed in your state and charges outrageous fees in exchange for making a few phone calls or completing some paperwork that a homeowner could do for himself. These actions rarely results in saving the home because the lending industry knows who these scammers are and seldom agrees to work with them. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.
The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the "rescuer" walks off with all the rent money and never paid a cent towards the mortgage.
The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don't know they've been scammed until they get an eviction notice.
The Internet Foreclosure Specialists: These fraudsters claim to have a "Nationwide Foreclosure Assistance Program." They have elaborate websites with false testimonials and an 800 number to call for immediate assistance. When you call, they will collect all your personal information first then tell you that "someone will get back with you shortly." They then sell your information to any fraudster that wants to buy it. That's who gets back with you shortly.
The Short Sale Flipping: These con artists will send you a letter, or might even knock on your door to tell you that they want to "buy your house and that they have worked with your lender in the past." They will make a valid offer on your property well below the market value and tell you that "they know your lender, and that they will accept the short payoff." They then open escrow and proceed to purchase your home. They notify you that "your lender has accepted the short sale." All the while, they have never talked with your lender. The scam here is this. They have an accepted offer from you to buy the property at a price well below the market value. When they opened escrow, they instructed the escrow company to show their vesting as "Their Name and or Assigns." They then find a buyer to take the assignment of the purchase and who will agree to pay the difference up front between the agreed sales price and the market value. Both you and the new buyer have been duped. The new buyer has been robbed of his upfront cash while you are still in foreclosure with no short sale agreement from your lender. The con artist walks away with cash equity because he sold his rights to a bogus purchase.
What You Should Know:
Before doing business with anyone, you should know where their place of business is. You should know how long they have been at that location. You should know how long they have been in business. You should know all costs involved with their service. You should know whether or not they are properly licensed to conduct business. You should go so far as to meeting the individual you'll be doing business with.
Who To Avoid:
1. Anyone who makes promises when logic tells you that those promises may or may not be keep-able.
2. Anyone who offers a service for free. They typically just collect all your documents then sell your personal information.
3. Anyone who comes to your door and wants to buy your house.
4. Anyone on the internet who claims they can modify your home loan but doesn't give pricing disclosure.
5. Anyone who offers a money back guarantee. Remember, they still have your personal information.
6. Anyone who comes to your door offering you a bail out loan.
7. Anyone other than an Attorney who takes your case on a contingency. You will wind up paying the final contingency amount even if a compromise is reached with your lender. Contingencies are usually 30 to 40% of the forgiven amount and lenders will not agree to pay the Loss Mitigator. You may have saved your home from foreclosure only to lose it to a Mechanics Lien filed by the Mitigator.
