I have friends and family that are facing foreclosure it is becoming a far more common problem for everybody now then it was just a few short years ago. Often it starts with just one missed payment which soon spirals out of control. Before you know it you have missed two, three, or even four payments and the lender wants you to pay the whole thing you owe all at one time, right then and there. Time and again this is a main problem to the homeowner and in the end they must decide on some kind of plan of action…this is ordinarily where one can fall for a swindle.
Foreclosure scams are very widespread as much as the problem itself. Given that homeowners think that they have no alternative they fall for these traps, which of course make their state of affairs a great deal worse than it was. Not only is the trauma of the foreclosure an issue, but then the fallout from the scam starts bringing additional stress.
The people who work these scams advertise on the internet, local newspaper, distribute flyer’s, send letters and call houses which are included on the foreclosure list. Sometimes they call themselves “mortgage consultants/real estate investment planners” who offer foreclosure services or promote with “We buy houses” signs.
Below are the most common scams:
Foreclosure Bankruptcy Scam
The promise here is that the house will be saved. This is how the scam goes…They will either ask for the homeowner to pay their mortgage directly to them, hand over their deed and pay rent, or obtain refinancing. of course they don’t do ANYTHING to fulfill the other end of the bargain, they don’t contact your lender or obtain refinancing for you. They keep all the money and file bankruptcy without your knowledge. Only to use a different name and do the scam agian on some other poor soul looking for help.
Since the homeowner is not aware that bankruptcy has been filed, they fail to participate in the case. The case is dismissed and the house continues onto foreclosure. Apart from loosing money and your home, you will also have a bankruptcy on your credit report.
“Skimming” or also called Equity skimming
The scam operator poses as a buyer. They then promise the homeowner to pay the mortgage or given them a sum of money once the property has been sold. The operator then convinces the homeowner to sign over the deed and move out. The homeowner can stay but they have to pay rent.
If they opt to move out the operator lets a third party rent the property. The scam operator of course does not pay the mortgage and lets the mortgage lender foreclose all the while stemming off questions from the original home owner about where they are in the “process.”
In the event the house has equity, the thief’s sells the property and pays off the debt. (And keeps the equity that the homeowner could have had if they sold it.)
Don’t fall for one of these thiefs contact a local mortgage office and ask them if they have ever heard of a “program” like the one you would be offered if not then call the local police and ask for the consumer fraud division.
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