The great American dream is quickly becoming the great American scam. With so many homeowners forced into foreclosure last year, and just as many expected this year, the number of people willing to swindle consumers out of their homes is also on the rise.
Those “We Buy Homes – Instant Cash” signs you see around many urban areas aren’t true. They simply prey on people in financial trouble.
“Instead of throwing them a life jacket, they are throwing them an anchor,” said Mal Maynard, executive director of the Financial Protection Law Center in Wilmington, N.C., a nonprofit group that advocates against predatory lending and provides legal services to borrowers who encounter abusive lending practices.
Here are the most common scams:
However, the sales price or monthly payments are typically inflated, making it impossible for you to buy the home back.
Eventually, the property is forfeited and the new owner sells the home at market value and pockets the equity.
In some cases, homeowners believe their lender has been paid – but don’t get proof before handing over deed.
But the homeowners are still liable for the mortgage, because you have merely signed over the deed, not sold the home. The scammer rents the home to a tenant with an option to buy – pocketing any down payment and rent – but never making a mortgage payment.
Eventually the lender notifies you that it is foreclosing on the property. The deed holder walks away with no liability.
Instead, you pay thousands of dollars in fees, and they do nothing.
In the end, you still might be forced into foreclosure or bankruptcy.
Most foreclosure scammers identify their victims by watching for property that has been listed for sale in court. They approach the homeowner with offers to help. Other scammers are contacted by potential victims who have seen a flier advertising “foreclosure rescue.” So if you’re a homeowner in financial trouble, thoroughly check out any organization before doing business with it.
Here are some other tips:
Many people miss out on real help – financial and otherwise – because they are too embarrassed to admit they got roped into a expensive mortgage.
Just remember: There is no shame in needing – or getting – help.
