Realizing that you’re facing foreclosure on your home may be the most trying and traumatizing time of your life. Don’t aggravate the situation by becoming the victim of a scam perpetuated by slippery con artists who take advantage of your desperation and fear. They do this by promising to help you save your home, and they’ve been scamming people successfully for years.
One prevalent and simple scam these companies or individuals use most often is charging a fee up front for their services. The scammers may convince you that they have experience and will handle the issue with your mortgage lender in return for a “modest” fee, in many cases the same as a mortgage payment. It won’t seem like a bargain when you discover it’s gone – and so is the scammer.
Another variation involves a company that offers to make your mortgage payments for you, for a nominal fee each month. After several months have passed while paying through this company, you find out that your money is not reaching your lender and you’re even deeper in in debt. You won’t be able to find the company that made it so expedient for you, since they have conveniently disappeared.
In other cases, homeowners facing imminent foreclosure are confronted by an individual that offers to help them out of their financial predicament. The scammers extend another loan to the desperate homeowners to save their home from foreclosure. In one instance of this scam, the company provides the loan at just under the legal limit for interest charges. Homeowners who were already suffering financially with their original loan now discover that they must make even larger payments or be subject to even higher penalties.
Daring scammers push the envelope even further. They execute a swindle called equity stripping. This means that they locate troubled homeowners who owe less than half of the balance of their mortgage. Then, they present the homeowners with a proposal to loan the money, again at egregiously high rates. When the homeowners begin to have problems paying the loan, they offer to forgive and again make them another loan. In each instance, the administrative fees and interest increases. Inevitably, the homeowner still loses the house, however they no longer have near the equity they once did.
Regardless of how desperate your situation has become, you should always spend time reading and making sure that you fully understand any papers that you sign. If you don’t understand what the document entails, have an attorney examine the papers. Do not trust any promises that are not made in writing! These are not contractually enforceable. Do not sign a contract that has blanks or has not been completely filled out. Many people are experiencing a difficult time with homeownership right now, so don’t feel that you are completely alone. Talk to your lender as quickly as possible if you find that you are having problems, they may offer alternatives that you were not aware existed.
Watch Out For These Real Estate Scams
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