Scams

SCAMS

Foreclosures unfortunately are on the rise.  In a time of high housing costs, mortgage rates increasing, uncertain economic times and the end of COVID-19 foreclosure protection, more homeowners are facing challenges.

Sadly, foreclosure scams still remain a serious problem.  There are unscrupulous parties that try taking advantage of homeowners struggling and are desperate to save their home.  It is important to have the knowledge and resources to avoid scams.

Four Common Foreclosure Scams

1. Phone and Internet Foreclosure Scams

Fraudsters try to find people who are struggling.  They make false promises to help homeowners save their home and will often be asked for some form of payment.  Typically, these fraudsters are trying to take your money, misrepresent their services, even their identity to get as much as possible from the victim.

2. Mortgage Refinance Scams

There are legitimate mortgage refinancing services. Scammers will tout great refinancing to take advantage of struggling homeowners and pose as a mortgage broker.  Many will tempt homeowners with fraudulent mortgage foreclosure rescue documents to try getting an initial payment before they run away without doing anything for the homeowners.

3. Scams on Lease-Back and Repurchase

You should be very skeptical of a lease-back and repurchase as a tool to avoid foreclosure.  It is one of the most common mortgage foreclosure scams. The fraudster will convince the homeowner to “sign over” the deed to the property, make promises they can clear the delinquent debt and repair your credit allowing to stay in the home.  Most often, you are put into an unfair agreement through which they can take your property through eviction.

4. Equity Skimming

This a type of foreclosure cam which scammers will try to get access to your property to squeeze out any last remaining equity and try to tell you to “give” them the property and move out immediately.  Then take over your mortgage payments and rent out the house.  Equity skimming, in reality, means collecting as much rent as possible while not making any mortgage payments.  The house will then quickly foreclose.

Below are some tips to make sure you avoid the scams mentioned above:

1. Do not pay up front fees.  Avoid any consultant who charges a fee before providing the service.

2. Be wary of sending mortgage payments to a new address.

3. Do not sign any paperwork you do not fully understand.

4. Work with a HUD-approved nonprofit housing counselor. www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm