Beware of Foreclosure Rescue Scams
With foreclosures on the rise, foreclosure-related scams have exploded onto the real estate scene. These so-called “foreclosure rescue companies” claim they will help desperate homeowners save their homes, but are really out to make a profit at the expense of someone grasping at any hope.
If you know someone teetering on the brink of foreclosure, read on and send this their way! Links at the end of the article are reputable sources to turn to.
Red Flags for Foreclosure Rescue Scams
If you are at risk of, or in, foreclosure, you should be on the lookout for common foreclosure scams. Here are some common red flags to watch out for:
- They ask for upfront money before providing a service
- They instruct you not to contact your lender, lawyer, housing counselor, family or friends
- They ask for mortgage payments to be made directly to their own company or a bank account set up by them, rather than to your lender
- They require payment only in the form of cash, cashier’s check, or wire transfer
- They promise to stop the foreclosure process, no matter the circumstances
- They advise you to transfer your property or deed or title to his or her company
- They offer to fill out paperwork for you.
- They ask for something to be done immediately and without delay
- They ask you to give them a power of attorney
- They ask you to sign a grant deed or deed of trust
- They ask for signatures on documents where some of the information has been left blank
In addition, they may encourage you to lease your home and buy it back over time. In short, anything that sounds too good to be true most likely is! Scam artists are skillful in getting you to talk about your situation, and their solutions coincidentally match up to your goals and dreams for saving your home.
One of our own clients wanted us to find someone who would buy his home at a price sufficient to clear his debt, allow him to live there and pay rent for 2 years and then he would buy it back from his “investor”. We told him it was essentially impossible to find that investor. Several weeks later, our client called us to let us know that he had found someone in New York who had an investor who would do exactly that. He had sent this person $1,000 in advance to make the arrangements. He had just one payment of $500 remaining before the transaction would be finalized. It turns out our client had described what he wanted to a scam artist who then told him what he wanted to hear. Needless to say, the money was gone forever, and the solution did not materialize.
People who are suffering financial setbacks are all too susceptible to anyone who gives them hope. Unfortunately, the bad guys know that, too.
If you have been a victim of a foreclosure-related scam or approached by a scam artist, you may report the incident to the following organizations and government enforcement agencies:
California Attorney General, http://ag.ca.gov
California Department of Real Estate, www.dre.ca.gov
Dept of Housing and Urban Development (HUD), www.hud.gov
Federal Trade Commission (FTC) www.ftc.gov
Better Business bureau, www.bbb.org
If you are at risk of foreclosure or have received a foreclosure notice, you should contact your lender immediately.
Source: California Association of Realtors