I have heard from a couple of different clients lately about foreclosure fraud, and how they were almost affected. I am sharing this with my readers so that you all can stay clear of this. Instead of spending all day telling you stories or giving you too much advice, I’ll try to make this short and easy to understand.
Access to lists that contain “Notice of Defaults” are very easy to get. This list shows who has defaulted on their home loan, and what the property addresses are. Scammers are getting a hold of these lists and doing a lot of damage with them. I’ve been told some scammers are even knocking on the doors of these homeowners and conning them at their own home. Here is a list of the most common foreclosure frauds to watch out for.
Myth #1: They promise you that if you sign over the title to your home to them, then the foreclosure will be recorded against them, and not you.
Truth #1: What happens is you lose your home to them, they get any equity you had in your home, the foreclosure still hits your credit, and they usually collect a fee from you for this.
Myth #2: They promise to sell your home as a short sale, which won’t affect your credit.
Truth #2: Short sales WILL affect your credit. They are a little bit better than a foreclosure in regards to your credit and future financing, but they ALWAYS affect your credit.
Myth #3: They promise to help you declare bankruptcy to save your home.
Truth #3: Bankruptcy can be a pretty messy affair. A lot can depend on if you lose your home or not through bankruptcy court. You should always consult your attorney and financial adviser before going this route. Most people suggest doing this ONLY if there is no other alternative.
Myth #4: For a fee, they promise that they have a special relationship with the bank and will work something out with your bank and save your credit.
Truth #4: There are no easy solutions when facing foreclosure.
Myth #5: *This is the most common scam* – They will purchase your home and lease it back to you with the option to buy it back from them in a year or two at a great price. This keeps you in the home and ensures, in your mind, that you can own it again in a short time.
Truth #5: They will have you sign title over to them. This means you just lost your home, and they got all of the equity. They also usually charge for this, and won’t give your home back to you at a great price. One thing to note, there are legit lease-options out there, so if you are getting yourself into this, please be careful. I would also be happy to look over any leases you are about to sign on this very topic to ensure its legitimacy.
Remember, if something sounds too good to be true, it usually is. I hope this will help prevent some of you from being taken advantage of, and losing much more than your home. Remember, no question is a dumb question, so if you have any issues with someone that crosses your path about this, ask them as many questions as it takes for you to feel secure in your decision making. The real professionals will not have a problem with that.
If you’ve spoken with someone and things didn’t sound legit, please contact the Division of Real Estate and let those guys do their thing. Let’s get as many of these scammers off our streets as possible.
Also, please don’t hesitate to contact me for additional information regarding foreclosure properties for purchase or if you are a home owner in need of some answers or assistance regarding foreclosure.
Real Estate Professional