If you think you’ve got problems now, just wait and see what happens if you fall victim to scam artist. There are people whose sole purpose in life is preying on people in financial trouble.
These people are experienced at their craft and some of the scams below are ones they use to influence you. Just remember, there is usually only one person in the world who always has your best interest at heart … YOU! You have to be careful, think about the services promised, and determine whether the promises are real or just another way of separating you from your money or your home. Think it through, compare, do some research and ask Sire Properties for real guidance and you’ll come out ahead every time.
Scam: Just pay us a fee and sign the house over to us. The foreclosure will be recorded against us, not you.
The Truth: The foreclosure will be reported against the borrowers on the note, not anyone else.
Scam: We’ll buy the property, lease it to you with the option to buy it back.
The Truth: It could actually happen this way, but in reality, to buy the property back you’ll need a new loan that’s probably larger than the one you were defaulting on and it will likely have an interest greater than the one you had. The payments will therefore be higher and it will be very difficult for you to qualify. In this situation, you might want to consider a small hard money loan if that’s possible to catch you up on the missed payments if you have any equity. If not, consider an open market sale or one to an investor and you’ll probably end up with more money in your pocket.
Scam: We’ll get you a new loan and solve all these difficulties.
The Truth: Every time you refinance, unless you are paying closing fees and related costs out of your pocket, your loan balance will rise. This is using up your equity. Lenders make a lot of money by just “churning” loans. You need to consider the total loan amounts, not just the monthly payments. Try to solve the basic financial problem, not just extend the time frame to repay the loan.
Scam: I specialize in pre-foreclosures and I’ll get your property sold quickly for top dollar.
The Truth: Some agents have a relationship with an investor and work from published notices of foreclosure. You’ll probably get an offer, but is it a good and fair one? If closing fast is high on your list of importance, make sure that the potential buyer can demonstrate financial viability – in other words, make sure they can deliver BEFORE you waste valuable time waiting for a cash buyer that never goes to closing.
Attorney Scam: I can stop your foreclosure by helping you declare bankruptcy.
The Truth: Bankruptcy does NOT STOP foreclosure. It puts a hold on foreclosure which can allow you time to reorganize your finances. Every area has reputable attorneys who handle bankruptcies. If this is the course you choose, spend the time to find one and spend the time to know what you have to do and when. Mistakes can cause things to get very bad very fast. Do you want it done right, or do you want it cheap? Also, while you are doing that, do not neglect to do what you have to continue to stave off foreclosure because you could still lose your house while you wait for your bankruptcy to be granted.
Property Scam: The Phantom Landlord
The Details: The most common scam happens either during or after the foreclosure. Someone breaks in to a vacant house, changes the locks and then rents the property out. When a property is advertised at below market rent and the phone number listed is only voice mail then the “landlord” wants to meet at a restaurant or other public place, it’s probably a scam. Even if you have vacated from a house moving into foreclosure, make sure you keep an eye on the property.
Property Scam: The Phantom Landlord II
The Details: Another variation on this same Phantom Landlord theme is where a person will give an owner of a property in foreclosure a cash amount for the equity in the home. The small cash payment gains control of the property which is then rented out and no payments are made to the lender. The “landlord” pockets any rents received while delaying the foreclosure as long as possible. This is great for the “Phantom Landlord”, but does you little good and can cloud your title if you try to sell the property.
Money Scam: Equity Skimming
The Details: In this type of scam, a “buyer” approaches you, offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold. The “buyer” may suggest that you move out quickly and deed the property to him or her. The “buyer” then collects rent for a time, does not make any mortgage payments, and allows the mortgage company to foreclose. Remember that signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.
The “Let Me Help You” Scam: Bogus Counselors
The Details: Some groups calling themselves “counseling agencies” may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself, for free, such as negotiating a new payment plan with your mortgage company, or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services call a HUD-approved housing counseling agency.
Finally (and above all), just be smart and if something seems too good to be true – IT SIMPLY ISN’T TRUE! Beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial difficulty. Here are several precautions that should help you avoid being “taken” by scam artist:
- Don’t sign any papers you don’t fully understand.
- Make sure you get all “promises” in writing.
- If you’re selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer. You can contact your state’s Attorney General, the State Real Estate Commission, or the local District Attorney’s Consumer Fraud Unit for this type of information.
Remember one basic thing. You are responsible for the shape you are in, regardless of how it happened, so doing whatever you can to fix your own problems quickly is the best possible advice.
Sire Properties can always help you, but you’ll first have to be willing to help yourself. Good Luck!