Don’t be the next victim to lose your house to “consultants” who claims they will pay your mortgage. With easy credit and loose lending practices many homeowners are vulnerable. With 25 percent of the houses owned by investors and investors are bailing, a drop in housing prices, and foreclosures is not too far behind.
As a general rule of thumb, foreclosure rates tend to go up in colder months simply because fewer houses are sold.
Foreclosure rescue scams are deals that proclaim to “save your house” or “pay your mortgage.” Don’t be fooled. There are 3 categories of foreclosure scams: (from the National Consumer Law Center in Boston)
- Crooks charge exorbitant prices saying they will help you but nothing gets done.
- The homeowner signs over his house thinking he’ll rent for a while then buy it back at a later date. Won’t happen.
- The bait-and-switch where the homeowner thinks he’s signing papers to refinance his mortgage but in reality it signs the house over to the crooks.
Often scammers place the house in a trust in the homeowner’s name then at a later date transfer it to themselves. And the mortgage company generally sees nothing amiss. The worst thing? The mortgage holder, you, are responsible for the monthly payments but you do not own the house anymore.
Fewer and fewer lawyers are taking on foreclosure problems because they have a slim chance in court of winning any awards.
Many times the predators are not strangers; they are children or friends. “Just put me on the title and I’ll help out” so people, especially the elderly, add their children to the title. Once it is legal, out go the parents on the street. Yes, it does happen.
The Department of Justice outlines a few red flags that you should keep in mind if you find yourself behind on your mortgage payments or facing foreclosure.
- Be suspicious of any person or company that calls itself a mortgage consultant or a “foreclosure service.”
- Be wary of marketing procedures. Don’t trust anyone who uses flyers or solicits for business door-to-door.
- Be suspicious of offers to lease back your home, so you can buy it back over time. These offers are weighted against you.
- Don’t fall for promises that seem too good to be true. Watch for promises that lure homeowners into deals. These offers may include promises to “save your credit” or maybe the company promises to “find a buyer within seven days.”
- Don’t sign anything with blank lines or spaces.
Here are some other tips:
- Never be pressured to sign a contract. Review the paperwork with a lawyer and don’t sign anything that has any blank lines or spaces. Information could be added later and you won’t know about it.
- Remember, verbal agreements don’t mean anything. You’ll want to get everything in writing and make copies of the paperwork. You can also check out the Better Business Bureau.
- Remember, legitimate companies will sit down with a homeowner and collect documentation. They will put together a package and present it to your lender.
To fend off foreclosure think about the following ideas:
- Convert any adjustable mortgage over to one with a fixed interest rate.
- If you have received a foreclosure notice contact your lender immediately. Many times something can be worked out.
- If all else fails, filing bankruptcy may be a possibility.
Doug
