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Avoid these Scams!
There are hundreds
of books, late night TV commercials, and websites concerning
“get rich schemes” by purchasing foreclosed homes.
When your foreclosure becomes public, many opportunists approach
you offering an “easy way out”. Be cautious, their
intent is to profit from your misfortune.
Scams usually involve the homeowner relinquishing
the legal right to their property by way of quit claim deeds,
land contracts or lease – buy back agreements.
Think carefully before you deeding away
your property rights to a private, opportunistic real estate
speculator. Talk to an honest,
reputable attorney, or lending representative, who will
look out for your best interest.
Foreclosure Websites
This website was developed by seasoned
attorneys, real estate professionals, and financial advisors
with the goal to educate homeowners in distress. We give you
the information you need to fight your foreclosure. We provide
referrals only to companies that we trust have the same goal
of helping people.
Other websites may claim to do the same,
but they mostly try to get you to give them your address.
Don’t do it! All that will get you is calls mail from
hordes of attorneys, speculators, and shady lenders who will
try to take advantage of your situation.
Quit Claim Deeds
Many homeowners believe that by simply deeding the property
to another person they will stop the foreclosure with the
lender. Scam artists promise to take over the payments, pay
the homeowner a sum of money, and then let them stay in the
house until it sells at a later time.
This approach usually fails, leaving the
homeowner without their equity and a ruined credit rating.
Why?
- Lenders will not negotiate with a real
estate opportunist, only the original home owner.
- Although the property is transferred,
you are still liable for the mortgage balance. The foreclosure
process continues, and you lose all other valid methods
to stop the foreclosure.
- Once the property is transferred you
have no rights to ensure that the investor is making the
underlying mortgage payments.
Don’t ever quit claim the
interest to your property in a foreclosure!
Lease – Buy Backs
Lease – buy backs are another popular scam to take away
your property rights. In a lease – buy back, the homeowner
agrees to sell the property for the mortgage balance, and
lease it back from the investor. The homeowner is now only
a tenant, and will be thrown out if the lease payments are
late. Imagine how much more difficult it will be to negotiate
with a real estate speculator compared to your lender if you
fall on hard times! If you ever want to buy the home back,
the opportunist will only sell it back at an inflated price.
Sale on Land Contract
The sale back on land contract works the same way as a lease
– buy back. The homeowner deeds the property to the
speculator, and then is placed on a land contract for a set
(and often inflated) purchase price. Although the land contract
give the homeowner better legal protection than a lease, it
is only the “lesser of two evils”. A land contract
should only be considered if the speculator can pay off the
mortgage balance, because for most mortgages, the balance
becomes due on a sale or default. If the speculator fails
to pay off the balance, the foreclosure continues and you
both lose.
Deed in Lieu of Foreclosure
Some unscrupulous lenders try to convince the homeowner to
give up their property rights early in the foreclosure process,
betting on the homeowner’s lack of knowledge of their
legal rights. This is simply giving up before all other options
are exhausted. There is little benefit for the homeowner to
enrich the lender so early in the process without compensation.
Need
advice?
See one of the professionals
in our Resource Directory.
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