Unfortunately, whenever you are dealing with money, there is always a scam artist on the prowl. This is true when dealing with the foreclosure process. These people try to take advantage of your financial troubles by offering solutions that sound to easy or too good to be true. Here are some scams you want to look out for.
o Watch out for equity skimming. Equity skimming is when a so called buyer contacts you and makes an offer to buy your property out or give you money when the property is sold. The so called buyer will ask you to move out and deed property to them. Then they try to either resell or rent the property out. Guess what? They are collecting rent, not paying your mortgage and allow the lender to foreclose. Meanwhile, you are still obligated to pay your mortgage.
o The three main foreclosure fraud categories according to the National Consumer Law Center and Bankrate.com:
o Phantom Help: The “rescuer” charges outrages fees for light duty phone calls and paperwork that you can easily do. None of these actions will save your property. This scam gives homeowners a false since of hope and prevents them from seeing qualified help.
o The Bailout: This is a scam when the “rescuer” has you sign over the title then informs you that you can still live in the house as a renter and eventually buy it back over time. Eventually, you will find out that the terms of this scam will make it impossible to buy-back the house. The “rescuer” walks off with the equity and you lose your property to foreclosure.
o The Bait-and-Switch: In this particular scam, the scam artist will have you sign documents to make your mortgage current. But, little do you know, you have actually signed over your ownership. You will not know you have done so until you get an eviction notice on your front door.
As you can see, there are many ways to get scammed in the foreclosure process. So make sure you sign documents you fully understand, get all promises in writing, make sure you have been formerly released of the mortgage debt, and keep in contact with your Mortgage Company and/or lawyer during the process It may also be good to do a background check on the prospective buyer of your property. Also, be very careful with e-mails offering deals to good to be true.
Pete Glocker is employed in the Education and Charitable Services Department at Debt Management Credit Counseling Corp. (“DMCC”), a 501c(3) non-profit charitable organization located in Boca Raton, Florida. Pete graduated from Florida Atlantic University with a BA in Multimedia Journalism and was a web producer Intern for Tribune Interactive products Sun-Sentinel.com and SouthFlorida.com. DMCC provides free financial education, personal budget counseling, and debt management plans to consumers across the United States. Debt management plans offered by DMCC help consumers relieve the stress of excessive debt by reducing credit card interest rates, consolidating and lowering monthly payments, and stopping collection calls and late fees. DMCC financial counselors can be reached for free education materials, budget counseling and debt management plan quotes by calling 866-618-DEBT or by visiting http://www.dmcccorp.org Pete Glocker can be reached by email at firstname.lastname@example.org.