Foreclosure Scams to Be Aware Of

Foreclosure Scams to Be Aware Of

Even though most lending agencies are professional and honest, there are some lenders, usually second mortgage issuers, who can use some unscrupulous and unethical methods to increase the risk of possible nonpayment by the homeowner. Some of their methods are lending significant amounts of money or charging huge interest rates, so the borrower won’t be able to make his payments on time. They can also refinance the loan without any benefits for the borrower. They are hunting for homeowners at foreclosure who are usually looking for any possible solution to their situation.

Equity Skim is one of the most popular tricks scammers use. They can offer you money when the property is sold or get you out of foreclosure by paying off the mortgage. They can also suggest you to move out and sign the deed over to them. Then they will collect rent from the property and afterward fail to make payments on the mortgage. In this case the lender will certainly have to foreclose. Remember that signing over doesn’t mean you are no longer have to make your mortgage payments.

Another thing scammers do is setting up a “counseling” agency. They can approach you and offer some services for a fee. In most cases you can do those for free by yourself. Nevertheless, most real services can be really helpful; contacting them is a right thing to do in a challenging situation.

Consult with your attorney before making any decision or accepting any deal on your home. Don’t sign anything that you do not understand completely and in details. Make sure that all obligations of the party you’re dealing with are written down in a contract or whatever is replacing it. Make sure you are released from the debt when selling your house. If you do decide to sell your home to stop foreclosure, look for any possible complaints about the buyer.


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