It is kind of sad I have to write this article. It doesn't say much for humanity when there are people out there scamming people who are facing foreclosure. However, they are out there and if this post saves just one family I will be happy. It it puts a few of the scammers behind bars I'll be overjoyed.
That said, let's look at the problem, a few of the red flags. some common foreclosure scams and a few ways you can protect yourself. Most of the information I am passing on is from the Arizona Attorney General's office... a great team trying hard to protect the public.
THE PROBLEM:Scam artists are preying on the frustration and fear people facing foreclosure feel. They make big claims of help... for a fee of course.
They act professional and often appear to have a good plan. They collect an upfront fee and vanish like Houdini.
RED FLAGS:- They guarantee to stop the foreclosure process no matter what your circumstances are.
- Instruct you not to contact your lender, attorney or credit counselor.
- Collect their fee prior to provide services.
- Accept payment by cashier check or wire transfer only.
- Instruct you to transfer your property deed or title to them or one of their agencies.
- Offer to fill out all the paperwork for you.
- Offer to buy your home for cash at a fixed price that is not set by the housing market at the time.
- Tells you to make your mortgage payment to them rather than you lender.
The Phony Counseling Service:
They tell the borrower they will negotiate with their lender if the borrower pays an upfront fee. Then they provide little if any service.
The Lease or Buy-Back Scam:
Homeowners are conned into signing over the deed to their home to the con artist and they can stay in the home until such time they can afford to buy it back. Often, the terms of the buy-back are so extreme the homeowner can not afford to buy the home back and are eventually evicted from the property.
Bait & Switch Scam:
Homeowners believe they are signing documents for a new loan to make the mortgage current but they are actually signing over the deed and left holding the mortgage for the home they no longer own.
Refinance Fraud:
Same as the bait and switch. Usually the con artist poses as a mortgage broker or lender.
DO NOT pay money to people who promise to work with your lender to modify your loan. There are exceptions to this rule, generally we advise clients to use reputable, well known attorneys or firms. The Attorney General's office or Maricopa Bar Association can help you.
DO call your lender yourself. Many are being much more agreeable these days and have staff in place to help you.
JUST because they seem nice and helpful doesn't mean they are. Scam artists are actors.
DO NOT sign over or transfer your deed as a part of the foreclosure avoidance transaction. You should only sign over a deed when selling your home for a fair price. We advise talking with a reputable real estate attorney if you have any questions.
DO NOT pay your mortgage payment to anyone other than your lender, even if the person promises to pass on the pay on your behalf.
DO have an attorney review any documents before signing. Many homeowners think they are signing new loan documents when in fact they are transferring ownership to the scam artist.
If it sounds to good to be true, it probably is. Report suspicious schemes to the Arizona Attorney General's office to help others, as well as yourself. They can be contacted at 602-542-5763.
WHERE CAN YOU GET HELP?The Arizona Foreclosure Prevention Help-Line is a good place to start. You can call them tool free at 1-877-448-1211.
We hope this post is of help. Please pass this information on to anyone you know who is facing foreclosure. Together we can keep each other safe from the bad guys.
Gene Urban
The Urban Team at Realty Executives
602-234-5777
If you are considering a short sale and would like more information, our Short Sale Web Site has lots of answers. www.Short-Sale-Phoenix.com
