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Homeowner resources for the prevention of foreclosure

As a homeowner facing foreclosure of your home, be careful of the people that will contact you.

Beware the scams.

While there are several legitimate services designed to help those facing foreclosure, there are just as many unscrupulous firms trying to take advantage of someone in distress. Solutions that sound too simple or too good to be true usually are. If you're trying to sell you home without the services of a real estate professional or attorney, beware of buyers who are trying the rush you through the process. While there are so many variations, you should be especially alert to the following scams:

Equity skimming

This is a scam involving a bogus “buyer” approaching you and offering to pay off your mortgage or give you funds when your property is sold. This bogus "buyer" will suggest that you vacate the home as quickly as possible and deed the property over to them. The bogus "buyer" then rent the property to a third party, collects the rent , doesn't make attempt at curing the mortgage, making any payments, and allows property to enter into foreclosure. In this case not only does the home get lost to foreclosure, you may still be responsible for any deficiency resulting from the foreclosure. Signing over your deed to someone else doesn't remove or relieve you of your obligation the original loan.

Bogus credit counseling groups

Some scammers representing themselves as consumer credit counseling agencies may approach you and offer to perform credit services for an upfront fee. The services rendered are often services that you could do yourself for free, such as negotiating a new payment plan with your lender, or pursuing a pre-foreclosure or short sale. Many of these are discussed in detail in this site. If you have any doubt about these third party services, check your local listings for a state, local or HUD-approved housing counseling agency.

Precautions you should take

We understand that you’re in the midst of some very trying time when facing foreclosure, and follow these simple precautions to avoid being “taken” by a scam artist:

Don't sign any paperwork that appears confusing, especially if you are being rushed to do so.

Make sure that all services offered are presented in writing and are again understandable.

Never sign over a deed to your home to someone else without consulting legal counsel, remember that doing so does not necessarily relieve you of your loan obligation.

Always check with your existing lender before entering into any deal involving your home and your mortgage.
Investigate if there are any complaints against the prospective buyer if you’re selling your house. You can usually find such information from your state Attorney General’s Office or the Real Estate Commission as well as the local better business bureau .

 

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