Foreclosure is a nightmare that any homeowner fears. If you are facing financial difficulties and are on the path to foreclosure, it is very important that you try to avoid the many foreclosure scams out there. Of course, you may have seen the billboards, flyers as well as TV and radio ads. There is a high chance that this sort of foreclosure ‘rescue’ companies are scammers waiting for a home owner in trouble to contact them. There is a very high possibility that a scammer will acquire your home for a fraction of its worth and purchase price or transfer your title in such a way as to allow them to resell or rent it. Even after you’ve lost ownership of the home, you will still have to pay your mortgage.
Three Types of Foreclosure Scams
There are three main types of foreclosure scams. One type will seek exorbitant fees for simple paperwork or phone calls that the homeowner can do without much hassle. This type of scam is known as ‘phantom help’ where homeowners are given false hopes while adding high charges for useless services while also preventing owners from getting real help. Another type of scam, known as ‘the bailout’ is all about deceiving the owner to sign the property over to the scammer by allowing them to believe that they can live in the property as renters until they can buy it back. Unfortunately, buying back the home is made impossible with the terms of their fraudulent agreements. In ‘bait and switch’ scams, the homeowners are made to think that they are bringing the mortgage current while actually surrendering the ownership of their property to the scammer.
Avoid Eviction Notice
The sad truth is, the owners rarely know that they are being scammed until the eviction notice comes along. In most cases, the failure to understand the terms of the documents leads to homeowners falling for this type of scams. The homeowner is at a vulnerable position as they approach foreclosure and it is mostly desperation that makes them an easy target for fraudsters. The scammers often promise homeowners that they will discuss the issue with their lenders and modify the mortgages. There is always an upfront fee involved along with a warning to not talk to their lender as not to interfere with the negotiations.
Help From Real Estate Attorneys
With high lawyer fees and fewer lawyers willing to take the case and the very low prospect of collecting a court award, it’s not easy to find help for scam victims. The best option for victims of foreclosure scams is to seek volunteer real estate attorneys. Of course, there has been situations where the victims managed to bring the scammers to justice but the chances of finding the right help to do this is quite low. It is always very important to be highly cautious and alert about scams if you are facing foreclosure. Be sure to contact your lender to discuss your options before you seek out any other professional advice. In some cases, they may be able to point you in the right direction.