It’s terrifying to realize how many homes are being stolen right out from underneath their owners under the guise of saving them from foreclosure. Officials are receiving more calls from foreclosure scam victims in a week than they received previously in a month.
Mortgage fraud rates have doubled in the last year according to FBI reports and the numbers are only expected to increase with the rising rate of foreclosures across the country.
There are many types of scams and quite a few variations of them. The National Consumer Law Center has identified the top three most popular and dangerous scams to be
1. Fake Help: The scam artist poses as a professional who has dealt with cases similar to yours and will offer you proof of his successful track record. He’ll offer to help you out in the foreclosure process and stop it entirely by utilizing his knowledge and the special resources available to him. His services will typically come at a hefty price tag that you’ll have to pay up front.
Scammers have charged and collected up to $1300 from homeowners desperate to stop their foreclosure. Usually the services the scam artist promises to handle are things you could have easily done yourself. You’ve been hoodwinked out of money that you could have used to get legitimate help from a lawyer and your house is likely to be too far along in the foreclosure process to save it, by the time you realize that you’ve been conned.
2. Bait-and-Switch scam: It might be possible to save your home if you could just refinance your mortgage and if you fit this particular profile, you might be at risk of being the victim of a ‘bait and switch’ scam.
You may think that you’re applying for a new loan but in actuality the scammer has sneaked in papers or has introduced legal language that surrenders your home to him. As reprehensible as it sounds, you can actually sign away ownership of your house without your knowledge, in exchange for a ‘rescue’ loan.
3. Rent-to-Buy Scam: You’re presented with a very sensible deal that allows you to stay in your home as a renter for a specified lease period. You are asked to sell your home to the scammer, which will allow him save your home by securing new financing with his good credit rating.
You agree to this scam and sell your home for a cheap price. The catch is though that the deal is structured in such a way that you possibly can’t win. You wont be able to buy back your house and the scammer might have you evicted or might default on the new loan and the house goes into foreclosure again.
Instead of saving you from foreclosure, these scams make it inevitable. Thousands of homeowners have had their lives shattered as a result of falling victim to these ’stop foreclosure’ scams.
Read more on The Top 3 Foreclosure Rescue Scams and How to Spot Them…
Filed under Scam Alert by on Nov 10th, 2009. 
You’ve just received a notice of default from your mortgage lender and you’re in a state of blind panic.
How do you find out how much time you have left and the options available to you? It’s terrifying to realize that you are on the brink of losing your home, especially after you’ve worked and sacrificed for so many years for the privilege of owning one.
An individual or organization approaches you in this state of confusion and offers to take the load off your back. They promise to handle the entire situation and state that they will take all the legal actions necessary to help you save your home. They show you case studies of former happy clients with smiling faces and references that check out. All you have to do is pay them their fee, put up your feet and relax.
Sounds too good to be true? The phantom help scheme is easily one of the most successful scams out there. It’s simple to dupe homeowners with false offers of help since they feel so unequal to facing such a trying situation. The homeowner may not be sophisticated enough to truly understand complex legal procedures or they may be intimidated by all the legalese. People from poor economic backgrounds and senior citizens are especially vulnerable to phony help offered by fast-talking scammers.
In almost all these cases, the individual offers to help you with things you could have easily done yourself for free. They may offer to-
* Make a number of important phone calls
* Negotiate a better mortgage payment plan with your lender
* Offer to discuss a refinancing loan with your bank
* Take on any additional administrative duties that are involved
* Promise to pull a big rescue down the line by pulling some strings
The scammer will happily charge you thousands of dollars for these simple services and assure you that they are doing everything that they humanly can to stop the foreclosure. What the scammer is actually doing though, is pocketing your money and delaying you from getting any real help. They will not do anything to stop the foreclosure and may ask you to cut off all contact with your lender and ignore any letters you might receive from the lender. If you express any doubts they will demonstrate false proof of their successful track record in similar cases.
By the time you realize what’s actually going on, it might be too late to stop the foreclosure. You can avoid becoming a victim of this particular scam by-
1) Not contacting any foreclosure rescue specialist who advertises his services via fliers, hand-written signs and door-to-door marketing.
2) Never paying for any ‘foreclosure rescue service’ up front. It’s illegal in most states to require you to pay an up front fee for assistance if you are in foreclosure.
3) Never sending your mortgage payments to anyone other than your lender. The ‘rescuers’ may offer to collect your mortgage payments and pay your lender on your behalf.
4) Contacting a state-certified counseling agency that will happily advise you on your situation at no extra charge.
Read more on The “Phantom Help” Foreclosure Rescue Scam – Don’t Fall For It…
Filed under Scam Alert by on Nov 4th, 2009.
Have you fallen behind on your monthly mortgage payments despite your best efforts? Perhaps you have even begun to dread the arrival of a foreclosure notice from your bank. If your home is the only asset you have left, you might justifiably be quite tempted by the idea of utilizing any equity you have in your home to lessen your financial distress. It’s a good strategy and the right deal can give you the breathing time you need to fix your finances–only if you don’t get scammed.
If you are facing foreclosure, then the money you’ve piled up in your home’s equity can be a lifesaver. Unfortunately many scam artists are out to strip you of the equity you’ve built up over the years and it’s frighteningly easy for them to do so with a ‘bail out’ offer. An individual or company might approach you with an offer to buy your house and sell it back to you later when your finances improve.
Let’s say your house is worth $550,000 and you’ve got $150,000 worth of equity. You decide to sell it to them for $400,000, which is just about what you owe on your mortgage. This isn’t a true sale in your mind, which is why you decide to sell your home for a song. You believe that it’s only temporary and that you’ll be able to buy it back pretty soon.
The company will take out a $400,000 loan as the first step towards draining your property of its equity. They may give you a little sum of money and get you to sign on to a two-year lease with the opportunity to buy it at the end of the lease period. Your situation goes from bad to worse pretty soon. The company might begin with a low rent figure and increase it steadily to the point where you can’t afford to pay the rent anymore.
You may not be able to meet $1500 a month but you have no choice but to agree to the higher rent. Instead of giving you time to repair your finances you are now worried about defaulting on your rent payments. The company evicts you from the property once you start defaulting on the rent, sells your $550,000 home, pays off the loan and pockets a neat $150,000 all for just a few months of work.
In many cases the homeowner does nothing about the situation simply because they don’t realize they’ve been scammed. It is possible to save your home with this strategy if you do find a legitimate company that is willing to bail you out. Unfortunately most of the foreclosure rescue companies out there are little more than fly-by-night operations set up to steal money from unsuspecting homeowners. You can avoid being a victim of this type of scam in the following ways:
1) Consulting a lawyer on any documents that you are asked to sign. Scammers will typically present you with a ‘quit deed claim’ document that’s written entirely in their favor.
2) Avoiding any home sale contract that doesn’t release you from your liability to pay off your mortgage. It is possible to sell your home and still be liable for the mortgage payments.
3) Being well informed about your rights and the legislation regarding home equity theft passed in your state.
Read more on The ‘Bail Out’ Foreclosure Scam – How To Avoid This Foreclosure Rescue Scam…
Filed under Scam Alert by on Oct 29th, 2009.
