Saturday, January 12, 2008

Foreclosure Scams on the Rise

In the article New Year, New Scams By Aleksamdra Todorova at we are warned of new scams to look out for.

Fake foreclosure rescue - The most common foreclosure rescue scam entails approaching homeowners in default notices of default are public record, easily accessible at the county clerk's office or local court with an offer to help them avoid foreclosure by negotiating with their lender. Some even offer to lend them the money needed to become current on the mortgage. The problem: They charge hefty upfront fees, do nothing in return and the property is foreclosed anyway. Minnesota's attorney general recently filed suit against two out-of-state companies Florida-based Foreclosure Assistance Solutions and Nevada-based American Housing Authority — for allegedly charging $1,200 and $1,395 fees upfront, respectively, and delivering no services in return.

Foreclosure rental scams - Even more perilous is a scheme to trick homeowners threatened by foreclosure into signing over the title to their home. The scammers typically target those who have some home equity left, with the goal to pocket that equity and disappear.

How it works: The scammers approach you with an offer to buy your house for the total amount you owe, plus a small amount of cash. You can then continue to rent the home, with the idea of buying it back later when your financial circumstances improve. The problem is, as soon as you sign over the deed to the house the new "owner" stops making the payments and collects your rent until the house is foreclosed. They may also refinance the property to take whatever equity is left. Eventually, the home goes into foreclosure and the tenants are evicted.

The only protection against this scam is vigilance. "The chances of someone good knocking on your door offering to help you save your house is very slim," says Ralph Roberts, author of "Protect Yourself From Real Estate and Mortgage Fraud."

1 comment:

Jeff Adams Scam Tips said...

Nice information Article for Real Estate Scam tips. Thanks for your post keep it up...