Fraud Tip of the Day - August 2
Foreclosure Rescue Scams
Thousands of
people with adjustable rate mortgages are about to be hit with a big jump in
their interest rate. The jump may make it impossible for homeowners to keep up
with the mortgage payments, which would open the floodgates for fraud.
State regulators are sounding the alarm bout foreclosure rescue
operators who claim they're trying to help you only to end up taking your house.
These are people who specifically target homeowners facing foreclosure.
The foreclosure plague is silently swallowing family homes, in many
cases unnecessarily, because homeowners wait too long to get help.
Waiting until the last minute to get help makes you a sitting duck for
opportunists who know you're desperate.
"And they will be contacted by
these people who are going to try to take advantage of them," said Deborah
Bortner with the Department of Financial Institutions.
Their promise
will sound like a way to keep your home. The classic foreclosure rescue scheme
involves an offer that involves you transferring your title or selling your home
to a so-called "investor", then leasing back your home with the option to buy it
back at a later date.
"(They'll say something like) 'for a fee, I'll
take care of your home for several years, then you can get back on your feet and
repurchase the home,'" Bortner said.
But the odds are stacked against
you. The monthly payments are typically higher than the mortgage payments you
couldn't afford.
State regulators say people rarely, if ever, get their
homes back.
Investigators warn homeowners to seek help from known
legitimate sources if they're having trouble keeping up with mortgage payments.
Walk away from anyone who suggests they can help you by having you temporarily
sign your house over to someone else.
Brad Benfield Department of
Licensing: "Don't sign anything that you believe might transfer the ownership of
your house because at that point, you have no leverage left," said Brad Benfield
with the Department of Licensing.
People who get lured into foreclosure
rescue plans not only lose their homes, they often lose all the equity in their
homes and many are evicted.
If you're having trouble making mortgage
payments, note the following:
- contact your lender immediately and try to negotiate a payment plan.
- Contact a reputable non-profit debt counselor.
- Consider selling your home so you can pay off the loan before foreclosure
and maybe have some cash to start over.
- And avoid all unsolicited offers from people who claim they can help you
save your home.
Foreclosure Rescue Scams Escalating
Beware of Foreclosure Rescue Scams