Everyday a new foreclosure scam pops up and one needs to keep up with how these scams work in order to spot potential scammers.?? Foreclosure scams can be broken down into three basic categories:
Phantom Help:?? People will pay a lot of money up-front to hire a foreclosure expert to help them in their desperate situation.?? Scammers who use the phantom help method will take advantage of their victims delicate situation and charge reasonable up-front fees, then perform little or no services and walk away from the situation with the homeowners money, having done virtually nothing.?? Often the services offered by the scammer are basic tasks that the homeowner could have performed on their own??with little or no money.?? The homeowner not only ends up losing money but also valuable time when they have little time to spare.
Bail-Out:?? The bailout scam involves the scammer offering some sort of plan or scheme to get the homeowner out of their situation by signing over their property to the scammer.?? The scammer offers to asume the debt, or cure the debt and rent the home back to the homeowner until they are back on their feet and able to buy their home back.?? Most times the scammer re-negs on his promises and either sells the house out from under the homeowners turned renters; collects the rent while doing nothing with the mortgage and allowing the house to go into foreclosure; or setting the buy back price so high that the original homeowner can not afford to get their home back and are later evicted.
Bait-and-Switch:?? In this scam the scammer depends on the desperation and lack of information on the homeowners part to convince them that they are signing a particular document when in reality they are signing something entirely different like a grant deed to the property.?? The scammer is gambling that the homeowner will not carefully read the documents or not understand what they are singing.
There are so many other foreclosure related scams cropping up including forgeries, theft, identity theft, property flipping scams, loan fraud, predatory lending practices, pyramid schemes, ponzi schemes, bankruptcy fraud, landlord-tenant fraud, short sale consulting fraud, and bank-owned property or REO fraud.?? A scam can be highly elaborate with front companies, official looking letters and false government documents, or as simple as a "We Buy Houses" sign on a telephone pole.
Don't forget to check out HouseRebate.com for the latest listings on the MLS and a complete list of foreclosure homes.
Next Week:?? Actual Examples of Foreclosure Scams
Google+
