Why Foreclosure is a Scam Artist’s Dream
Going through foreclosure can be stressful, primarily because most homeowners are not very knowledgeable about what the process entails and what their rights are prior to being foreclosed upon. Unfortunately, this presents the perfect opportunity for scam artists to swoop in and take advantage of unsuspecting debtors. When it comes to protecting oneself from these fraudsters, the best defense is knowing their tricks before one becomes their target.
Here are some of the most common scams those undergoing a home foreclosure encounter.
Offering Unnecessary Counseling
When a foreclosure action has been filed on a person’s home, it likely will not be long until he receives a call from a counseling agency that is eager to help him through it. While this sounds like a fantastic offer upfront, the counselor is unlikely to offer much real help at all. Instead, the agency will simply complete forms the homeowner could do himself, and it will do so without any true legal guidance but with a hefty price tag. The better alternative for individuals facing foreclosure is to seek out a West Palm Beach foreclosure defense attorney, who is best equipped to protect his rights and ensure the process goes as smoothly as possible.
One of the most common scams homeowners are faced with are balloon payments, which offer a quick fix now and major problems later. A lender will approach a mortgager with a refinancing option that promises lower loan payments, but the problem lies in the fine print. Those installments typically cover only the interest the loan is accumulating, and the full amount borrowed will be required in one lump sum at the conclusion of the loan term. Given that such a large payment is often difficult for a homeowner to deliver, the debtor often finds himself facing foreclosure once again.
Signing the Deed Over
One of the most prevalent ways homeowners facing foreclosure are deceived is by signing over a home’s deed. This scammer can take the form of another lender or even an interested buyer. In the first scenario, the lender will convince the homeowner to sign over the deed in exchange for a new financing agreement. However, that agreement will not be finalized — at least not legally. Instead, the lender will treat the relationship as that of a renter and tenant, and if the rent disguised as mortgage payments are late, he could be evicted. In instances where the swindler is disguised as a buyer, the scam the homeowner faces is equity skimming. The buyer will claim that he will pay off the mortgage in exchange for the deed to the home. However, transferring a deed does not necessarily transfer one’s responsibility to repay the loan. Therefore, when the scammer fails to satisfy the mortgage and the home is foreclosed on, it will be the previous owner who is charged with footing the bill.
If you fear foreclosure may be on the horizon for you, a West Palm Beach foreclosure defense attorney can you walk you through potential alternatives and ensure your rights are protected. Call our office today to schedule a no commitment consultation on your case.