Beware of offers that are too good to be true

In our last blog post, we mentioned that foreclosures seem to be going down.

But the unfortunate reality is that foreclosure is still a looming threat for many people, including some of our clients. If you are in danger of losing your home to foreclosure, you should be aware that there are a lot of scam artists out there who are all too willing to take advantage of your situation for their own benefit.

These scam artists know that you are vulnerable because you are looking at all possibilities to save your home, leaving you open to consider an option that you normally would not.

You could unwittingly sell off your home

Today, we’re going to list some common foreclosure scams that you should be aware of:

Internet and phone scams
Beware of help arriving via the Internet or the phone. These scam artists typically offer you a low-interest mortgage loan and then request your personal data, such as your social security number and bank account numbers, in order to “process your loan.” You may then be asked to provide a payment for loan processing but such a loan doesn’t exist and you are now a victim of identity theft.

Partial interest scam
In this case, you are asked to sell a partial interest of your home to one or more people who are supposedly going to be making payments on your delinquent mortgage to make it current. You are instructed to make payments smaller than your monthly mortgage to the scam artist. You should never sell portions of your home off, especially to people you don’t really know.

Lease-back or repurchase scam
In this case, you are told that the individual or company can pay off your delinquent mortgage, and perhaps also repair your credit and pay off any outstanding balances on your credit cards. It sounds like a great solution, except that you are asked to sign your house deed over to an investor, supposedly on a temporary basis. You’re told that you can stay on in your home as a renter until you get back on your feet financially and can buy back your home. But the new owner can evict you and is not obligated to sell you back your home. Be aware that no one should ever ask you to sign over your deed. That is a huge red flag that the person is a scam artist.

Refinance scam
This kind of scam is trickier to detect because they are camouflaged as the commonly known “refinance loan.” In this case, the scam artist offers you a refinance loan with payments that are affordable for you. But the loan papers actually turn out to be deed transfer papers. Scam artists in this case are taking advantage of the fact that loan documents can be confusing because they are so numerous and contain so much legalese. Remember that it’s important to read every single word of every document you sign. You may want to have a trusted friend or relative look over documents as a safety measure.

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