A foreclosure is one of the most dreaded things among homeowners. Scammers know this and target those who are facing imminent foreclosures. Below are some common foreclosure scams.
In this case, the 'rescuer' offers to pay out your mortgage in exchange for the property's title. They sweeten the deal by agreeing to rent out the house for you until you can settle your debt to them. The problem is that the rental terms are likely to be prohibitive — the scammers count on this because they want you to default. You lose your house to the 'rescuer' if you default on your rent.
Bait and Switch
The bait and switch scam will work best on you if you are not conversant with most processes in the real estate industry or you don't take the time to scrutinize real estate documents. The perpetrators will offer you 'help' and ask you to sign some papers. They might tell you that you are signing the rescue agreement. In the real sense, you will be singing over your home-ownership to the scammers.
In this case, the scammers offer to help you refinance your mortgage at a fee. The fees tend to be high and not proportional to the services offered. At best, the scammers will just make some phone calls or file some papers — things that you can easily do on your own. At worst, the scammers might not do anything to help you refinance your home.
This scam targets defaulters with dismal credit scores and most defaulters fall in this category. In this case, the scammers ask you to sign over your home title to another person with a better credit score than yours. The explanation is that they will use a better credit score to apply for a refinancing plan with good rates. Unfortunately, that doesn't happen and you end up losing your home.
Forensic Loan Audit
The forensic loan audit sounds good and practical in theory. The supposed auditor offers to help to audit your loan application and agreement to unearth errors or legal violations that the lender made. The premise is that you can use the mistakes to force the lender into refinancing your loan with better terms. Once you pay the auditing fees, the auditor does nothing more than enter your details into a computer program — very few of these audits reveal significant errors.
Hopefully, you won't be a victim of foreclosure scams any time soon. Make it harder for the scammers to steal from you by consulting a real estate lawyer before taking part in any foreclosure-avoidance technique. For more information about real estate law, contact a local firm.