Foreclosure Rescue Scams to Look Out For
Distressed homeowners already have enough on their plate without having to worry about falling victim to mortgage rescue scams. Sadly, the number of foreclosure scams reported in the last couple of years has increased dramatically.
Perhaps it is out of sheer desperation why these troubled homeowners believe that there is actually an easy and simple way to stop foreclosure. Or, it can be attributed to insufficient information and lack of knowledge regarding the foreclosure process. Whatever the reason, homeowners should be aware of these so-called foreclosure rescue scams in order to avoid being victimized.
Here are some of the most common schemes that troubled homeowners should stay away from.
- Leaseback/ Buyback Program – this scheme involves the foreclosure rescue company, a buyer and the homeowner. The so-called buyer will take over the mortgage payments and then after a year, the homeowner has the option to buy back the property. The owners do not need to vacate the premises and in return, they will only need to pay rent. For the first couple of months, the mortgage payments will be paid. But the payments will eventually be stopped without the owner’s knowledge.
- Refinance Scheme - a foreclosure company will convince the owner to refinance and in order to avail of good mortgage rates; the owner will need to sign over the deed to the foreclosure company.
- Bankruptcy Filing Scheme – the owner will be convinced to file for bankruptcy and the mortgage rescue company will request payment for the legal fees and other expenses incurred in the filing.
All these foreclosure rescue scams end with the owners losing their homes to foreclosure and sometimes even their entire savings. It is very important for troubled borrowers to find out what their real options are by asking their lender, broker or lawyer. Also, they should be suspicious of surprisingly-good offers to stop foreclosure since most of the time, they are simply just that – too good to be true.