Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
Foreclosure Scams
The profits from luring
a home owner into a short sale oftentimes attracts
people into the loss mitigation industry who lack moral
character or an ethical framework that truly seeks your
best interest.
If any company or person
claims they can stop your foreclosure immediately by
signing a document appointing them to act on your
behalf, you might be signing over the title of your
property and becoming a renter in your own home! Never
sign a document without reading and understanding all
the terms and getting professional advice from an
attorney, a trusted real estate professional, or a
housing counselor.
Home owners are in a vulnerable
position today, unaware of their legal options to avoid
foreclosure many find themselves victim of scrupulous
investors or housing agencies who capitalize on the current
housing crisis. Their strategy is to win your trust, with
the promise to renegotiate the terms of your mortgage with
your lender, after you are told that the bank is unwilling
to agree to any workout, they present to you the last
option, a short sale. In fact, the investor has never
called your lender and only seeks to buy your property from
the lender at a price that has been discounted by half of
its true market value. Yes, a short sale is an option,
a tool that can prevent you from having a foreclosure on
your credit profile for seven to ten years. However, the
profits from luring a home owner into a short sale
oftentimes attracts people into the loss mitigation industry
who lack moral character or an ethical framework that truly
seeks your best interest. The bank wants you to keep your
home, they are not in the business of repossessing homes.
Common
Foreclosure Scams
Equity skimming:
A "buyer" approaches you, offering to get you out of
financial trouble by promising to pay off your mortgage
or give you a sum of money when the property is sold.
The "buyer" may suggest that you move out quickly and
deed the property to him or her. The "buyer" then
collects rent for a time, does not make any mortgage
payments, and allows the lender to foreclose. Remember,
signing over your deed to someone else does not
necessarily relieve you of your obligation on your loan.
Phantom help:
The "rescuer" charges outrageous fees for light-duty
phone calls or paperwork that the homeowner could easily
do, none of which results in saving the home. This
predatory scam gives homeowners a false sense of hope
and prevents them from seeking qualified help.
The bailout:
In this foreclosure scam, the homeowner is deceived into
signing over title with the belief that he will be able
to remain in the house as a renter and eventually buy it
back over time. The terms of these scams are so onerous
that the buy-back becomes impossible, the homeowner
loses possession and the "rescuer" walks off with most
or all of the equity.
The bait-and-switch:
In this scam, the homeowners think they are signing
documents to bring the mortgage current, but instead
actually surrender their ownership. They usually don't
even know they've been scammed until they're evicted.
Phony counseling agencies.
Some groups calling themselves "counseling agencies" may
approach you and offer to perform certain services for a
fee. These could well be services you could do for
yourself for free, such as negotiating a new payment
plan with your lender, or pursuing a pre-foreclosure
sale.
