FORECLOSURE RESCUE SCAMS
Homeowners who have exhausted all other options and are
finally facing foreclosure become prime targets for scams. Offering “rescue”
plans, these scam artists prey upon the desperation of those who are grasping at
any opportunity to save their home.
The three main scam formats are:
Promises of help that
never materialize: Convincing the homeowner that appropriate letters and
phone calls, which the rescuer will take care of, will save their home. While
this intervention is typically too little and too late, the rescuers charges
high fees for efforts that could easily have been done by the homeowner. In
many cases, the scammer simply takes the money and runs.
to “bailout” the homeowner: While
particular schemes vary, the final result in each situation ends with the
homeowner losing title to their home. The home transfer is encouraged by
the rescuer’s promise that the homeowner can retain residency as a renter and
will be able to re-purchase it after the rescuer solves the financial
predicament. Of course, the homeowner will never recover the property and any
equity that might have existed will be long gone.
ownership: This fraud begins with
the homeowner believing that s/he is acquiring a refinance loan as a way to
solve their financial difficulty. Thinking that they are signing loan
documents, the borrower discovers too late that they signed forged documents
deeding ownership to the supposed rescuer.
Scammers are experts at making something that is too good to
be true sound reasonable. Of course, it helps when the recipient of the bogus
information wants to believe it.
The following list of tips may help you to NOT become a
victim of foreclosure scams. Beware if your contact:
∙ Asks for money upfront before proving
∙ Instructs you
not to contact your lender, lawyer, housing counselor, family,
friends or others.
∙ Asks for mortgage payments to be made
directly to his/her company or bank
account established by that person rather than your lender.
payment only in the form of cash, cahier’s check or wire transfer.
∙ Promises to stop the foreclosure
process, no matter the current circumstances.
∙ Advises you to
transfer your property deed or title to his/her company and/or to
Offers to fill out paperwork for you.
Asks for something to be done immediately without delay. This includes
pressuring you into signing paperwork that
you’ve not had a chance to read
thoroughly or do not fully understand.
Encourages you to lease your house and buy it
back at some future time or over
Asks for you to give them power of attorney.
Asks for signatures on a grant deed or deed of trust.
Asks for signatures on any document with any blank lines.
Fails to provide copies of signed documents.
Refuses or fails to put an oral promise in writing.
For additional information on foreclosure scams and what to
do if you suspect foreclosure mismanagement or fraud go to:
and paste this internet address)
The above will take you to the
Department of Real Estate (DRE) sites where current information will be