Common Foreclosure Scams
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Filed under: Foreclosure
For many homeowners, the experience of foreclosure has become all too real in this tough economy. The housing market and mortgage debt crisis has hit new highs over the last few years, leaving many scrambling to find a solution. Unfortunately, as the number of struggling homeowners increases, so has the number of foreclosure alternatives scams. The Federal Trade Commission is warning consumers to watch out for these common foreclosure scams.
The Rent to Buy Scam
This scam is one of the most commonly overlooked by homeowners in the illegitimate mortgage relief industry. Appearing to be a solution that helps the homeowner avoid foreclosure by buying back the home, many have fallen victim to this crafty scam. It involves getting homeowners to sign over the title of the home to the mortgage relief company, while they agree to let you rent the home and buy it back over time. However, the fine print reveals that the lease/purchase conditions are too outrageous for anyone to maintain, leaving them evicted when they default on the agreement. When this happens, the company sells the home and keeps the profits.
The Bait And Switch Scam
One of the simplest scams that can easily go undetected by homeowners is the bait and switch. Although legitimate foreclosure help can be a tedious process requiring the homeowner to sign numerous documents, a legitimate company will be sure to explain everything along the way. This scam involves an illegitimate company hiding documents within legitimate paperwork and tricking the homeowner into signing it. The document essentially signs over the deed to the house to the hands of the company, leaving the homeowner without a home or any rights to the property. The company then sells the home for profit.
The Phantom Help Scam
Homeowners looking for mortgage debt help often seek counsel from a mortgage relief or foreclosure alternatives company. In this scam, the fraudulent company has the homeowner pay fees up front for their services, in which they simply never perform. Agreeing to pay the mortgage on the homeowners behalf or file paperwork with the lender, the company never follows through and the homeowner is left in foreclosure anyway while the company pockets the “service fee” money.