| Recipe for a Foreclosure Scam? |
| Articles - Mortgage |
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The other day, my wife and I ate lunch at a local sushi restaurant where the sushi chef misspoke. He asked me if I wanted an order of scams (instead of clams). Of course, I graciously declined, but almost every day it seems like I hear about another real-estate-related scam. Who knows? Maybe there are as many varieties of scams as one could order in a sushi restaurant! If so, here are three categories:
The other day, my wife and I ate lunch at a local sushi restaurant where the sushi chef misspoke. He asked me if I wanted an order of scams (instead of clams). Of course, I graciously declined, but almost every day it seems like I hear about another real-estate-related scam. Who knows? Maybe there are as many varieties of scams as one could order in a sushi restaurant! If so, here are three categories: Spirit Helper: The scam artist pledges to the homeowner that for a fee, he will be able to cut the owners payments by a third. Then after taking the owners money, the scammer vanishes like a waiter in an expensive restaurant - never to be seen or heard from again. The Rescuer Technique: In this one, the helper offers a scheme which will save the homeowner from his dilemma. One common example involves a promise to take title to the property, make up the back payments, and then lease the property back to the homeowner until he can purchase the property. Usually the scammer ends up not honoring the rent-back agreement, kicks out the owner and sells the property to another buyer. Tempt and then Switch: The homeowner is saved from his dilemma by the generous helper who offers to bail him out. Perhaps the helper promises to take title to the property, modify the loan, and then lease the property back to the homeowner until he is able to purchase the property. Usually the scammer ends up not honoring the agreement, and does the old switcheroo. Meaning that because he is the owner, he can legally kick out the owner. Often the helper rents the property until it is foreclosed upon and keeps all the rent receipts for himself. In addition to these types of deals, there are many other kinds of scams, including identity-theft, loan fraud, and even elder abuse. How do owners meet these people? The helper can contact an owner by mail or telephone solicitation or sometimes an owner will contact a scammer via a We Buy Homes or Stop Foreclosure Now sign on a telephone pole. Therefore, if a helper asks for money upfront before providing any service " beware. If he asks for payment only in the form of cash, cashiers check, or wire transfer"beware. If he asks for a transfer of title or an interest in the property"beware. If he gives an unqualified promise to stop foreclosure or other assurances "beware. If he offers to buy a home for a price above its market value--beware. Just as one would be wary of eating raw fish as a restaurant with a quality rating of D " when it comes to foreclosures, short sales and loan modifications, you should be extra cautious with people offering their services to help you too! DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Real estate broker Bob Boog has thirty years of experience in the real estate field, and has written three books on selling property. His latest gem, Mortgage Modifications Made Easy is available for download, and a free sample can be found at his website. |