Foreclosure
Scams to be Aware of
Homeowners facing foreclosure should be aware of
unscrupulous lenders and scammers. Don’t get me
wrong, most lenders and agencies are reputable
and legit. However some lenders, commonly second
mortgage issuers will use unethical practices
that increase the risk of nonpayment by the
borrower. These tactics may include lending a
large amount in hopes that the borrower will not
be able to keep up with the payments, charging
outrageous interest, points or fees. They may
also repeatedly refinance the loan without any
real beneficial reason to the borrower.
Homeowners facing foreclosure are often targets
of these scammers because they are seeking any
solution possible at the time.
One of the most common tricks is an “equity
skim”. What is equity skimming? This is when a
buyer approaches you and offers to get you out
of foreclosure buy paying off the mortgage or
offering money when the property is sold. They
will often suggest you move out quickly and sign
the deed over to them. They will then collect
rent from the property and fail to make payments
on the mortgage. The lender will continue the
foreclosure process and foreclose. Signing over
the deed does not mean you are no longer
obligated to make mortgage payments.
Another trick scammer’s use is to set up a
“counseling” agency. They may contact you
offering to do certain services for a given fee.
Often times these are thing you can do yourself
for free. It is important to note that most
services are legitimate and will provide lots of
great help.
So what do you do if you suspect you are being
duped? The most important things is don’t sign
any documents unless you fully understand what
you are signing. If the party you are dealing
with makes any sort of promises make sure they
are in writing. If you arrange a contract of
sale loan assumption make sure you know weather
or not you are released from liability of the
debt. Consult with your attorney before agreeing
to any deal that involved your home. Should you
decide to sell your home to stop foreclosure,
have a look at any possible complaints pertaing
to the prospective buyer.
This article is the property of
www.1st-in-homeloans.com, which has been
offering home mortgage services since 2002. To
find out more visit
www.1st-in-homeloans.com
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