We can’t say it enough: this is a bear housing market. It seems like every day there is a new lawsuit or case brought against fraudulent short sale/foreclosure/credit card debt counseling services. That’s because these frauds thrive on the anxiety and panic of homeowners facing foreclosure.
Here are some foreclosures scams to watch out for:
A forensic audit
It sounds like a CSI crew is going to read the hieroglyphs of your mortgage agreement and get you out of trouble. And that’s basically the claim: ‘Our attorneys will do a painstaking evaluation of your mortgage agreement and get you off the hook!’ Not only is this unfair to your lenders, it is completely unlikely anyone is going to look at your mortgage agreement more than once without concluding there is ‘nothing to be done.’
Sign the title over and we’ll do the rest
There are a number of variations of equity skimming scams. In an equity-skimming scheme, someone will approach a homeowner and claim to be able to sell his or her house. They must sign over the title and in exchange they will soon be free of their mortgage payments. Though not completely illegal, this practice is unethical and has been outlawed in some states. What you lose is the equity, the money you have paid down on the mortgage. You may be free of your home, but you have been defrauded of the investment you made.
What’s worse, in many of these schemes they ask you to move out, and once the deed has been transferred, they will rent the property until the bank forecloses.