How to Avoid Foreclosure Scams (Part 2)
Posted on October 17th, 2009
As mentioned in Part 1 of this series on foreclosure scams, scammers tend to prey on unsuspecting homeowners facing foreclosure. The scammers advertise using the web, newspapers, flyers, billboards and posters. They also contact homeowners via letters, phone calls and visits. Sometimes they target particular ethnic groups, neighborhoods or senior citizens.
Oftentimes they request personal and financial information such as social security numbers, personal identification numbers (PINs), credit card numbers and bank account numbers. Homeowners who release such information without first verifying the authenticity of the scammers face extraordinary risks of losing lots of money, their equity or even their homes.
Therefore, if you are a homeowner facing foreclosure, you should be especially cautious when dealing with people who make offers of “foreclosure assistance.” Some of these people are really scammers and will use whatever tricks they know to separate you from your property. Check out www.fightforeclosurecentral.com for legitimate help on stopping foreclosures.
Here are three more of the 10 scams most commonly perpetrated by foreclosure scammers:
4. Deed Snatching. The scammer paints a hopeless picture for you and claims that there is nothing you can do to save your home. He then convinces you to sign over the deed to your home. This is very dangerous as you are essentially transferring legal ownership of your home to a scammer or to a third-party accomplice. Naturally, you would lose any and all of the equity you had in the property.
5. Bankruptcy Roll. The scammer offers to help you file bankruptcy. It is important to note that a bankruptcy only postpones but does not eliminate the foreclosure. You may be charged lots of upfront fees and your bankruptcy may or may not be filed. The scammer continues to delay the process and continues to ask for more fees for newly found expenses. By the time your filing is completed, if ever, you will have already paid too much money and may still lose your home.
6. Lowered Listing. The scammer operates as a licensed realtor who convinces you to list your property with his brokerage firm to get a quick sale. He lists your home in the multiple listing service (MLS) and promises to get you lots of visibility and a great price. The problem is that he could be working with an accomplice to team up against you. The accomplice then offers a really low price and pushes you to sell quickly. Again, you would lose any and all of your equity.
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How to Avoid Foreclosure Scams (Part 1)
Posted on September 15th, 2009
Con artists are always on the lookout for new prey who may be particularly vulnerable because of their financial circumstances, and may be tempted by a smooth talker offering a quick and easy fix. The lure of big profits in foreclosures has attracted a growing hoard of con artists who perpetrate a variety of scams on unsuspecting homeowners facing foreclosure.
These scammers market themselves as foreclosure or mortgage consultants with a variety of services, including foreclosure rescue, money to lend, debt consolidation and easy credit. While the vast majority of such consultants offer valuable services, the scammers present an aura of legitimacy while intending to take advantage of homeowners in default.
Homeowners who are not careful about dealing with these scammers could end up losing lots of money in large up front fees. Worse yet, the homeowners could lose their equity or even their homes.
Here are three of the most common foreclosure scams. Parts 2 and 3 of this blog series will present additional scams that homeowners should avoid.
1. Advance Fee. The scammer offers to negotiate with your lender on your behalf to get some loan assistance. He may charge a huge up-front fee of several thousand dollars and may overwhelm you with lots of confusing paperwork. In the end, after several promises and unreturned phone calls, you end up with no new loan and with your money gone.
2. Loan Strapping. The scammer offers to provide you with a second mortgage, to cover the cost of your back payments and fees. However, he charges high interest rates and a huge number of points, along with very strict default terms. These high costs are intended to place additional pressure on you because of the additional monthly payments. You could end up losing some or all of your equity. Worse yet, if you default on the second mortgage, the scammer then initiates foreclosure with the intent of taking your home as well.
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