Beware of Foreclosure Scams

  1. A buyer wants me to sign a contract where I move out immediately. The buyer then will bring my loan current, will fix up my home and resell it giving me 20% of the net sale proceeds. It looks like a good deal. Should I sign this contract?
  •  NO, NO, NO, you should not sign the contract. This scenario is often used by scam artists and is called "equity skimming" or "rent skimming" . The scam artist is not interested in making a profit on selling the home therefore he will not fix up your home nor bring your loan current as promised. Instead they will rent it keeping the rent without paying the lender. When the lender eventually attempts to foreclose they transfer the ownership to various different entities who then file bankruptcy to further delay the sale at the same time collecting rent for your property.
  • By transferring title you loose the loss mitigation workout of your loan offered by most lenders. You move out incurring additional living expences. The foreclosure will show on your credit history dispite the transfer of title to the scam artist. And worse the arrearages on your loan continue to accrue which may be enforcable by a deficiancy judgement after the foreclosure sale.
  1. I have been overwhelmed by flood of offers form companies who want to help me in a variety of ways. Should I sign up with one of them?
  • Companies that claim they can eliminate your debt for a fee of $$. The truth is there is no magic pill. By paying such companies you will be wasting your precious time and money.
  • Companies that say "We will buy your house for cash". This is a good alternative if you have equity in your property and even so the cash buyers are looking for big discounts when they buy. They know you are desparate and facing foreclosure and you probably do not know the current market value of your property. One call to your local real estate professional can help you know what your home is worth in today's market and can help you sell your home for its current market value. Don't give your home away to someone trying to take advantage of your situation.
  • Companies that can refinance your loan and save you from foreclosure. Borrowers in default have bad credit that usually means they will have higher interest rates. Doing a refinance before default is usually the best option for most borrowers. Also the refinance works when you have equity in your home. Be sure to shop around for rates before signing on with any of these offers. Also, instead of refinancing you should look at the loss mitigation alternatives offered by your lender which might be your best option.
  • Companies that will negotiate with your bank on your behalf with a fee. This is the hardest area to distinguish the good from the bad. There are many agencies that sincerely want to help borrowers in default, the others are merely scams. There are credit counceling agencies that help you for a nominal fee. Also there are agencies that take a fee and do nothing.
  • Attorneys. Attorneys are invariably very good and honest and they represent your interest. But some attorneys may not know all the alternatives you may have and may suggest Bankruptcy as your only choise. Also the bank's loss mitigation process is a new territory for most and they will not be interested in pursuing this route because they don't know how they will be paid. There have been many instances of home owners being ripped off by attornies who claim they will negotiate with the bank and charge fees upfront and even more fees later as they claim they will have a positive outcome soon only to come back with "your case has been denied".
  • Short Sales. When the mortgage amount is bigger than the value of your home you can still sell your home before it goes to foreclosue and negatively affects your credit. There are real estate professionals who know the foreclosure process and can navigate through the complicated paperwork the lenders require. This is sometime the best and only option left when there is no equity left in the home. The real estate commissions are paid by the bank so you don't even have to pay the realtor to work for you.

 How we can Help You?                 Avoid Foreclosure