Avoiding Foreclosure Scams

If it weren't bad enough that so many people are facing the prospect of losing their homes, they also have to watch out for people trying to scam them out of their home too. It's unfortunate, but true.

Here are some popular scams that you need to watch out for:

Scam # 1: Sale-Lease-Back
The sale lease back works like this. An unscrupulous investor offers to buy your house and agrees to lease it back to you. This way you don't have to move. Sounds good doesn't it? That's why there are so many victims. The problem is that the investor really wants the house. They will usually charge you market rent and wait until you can't pay so they can evict you. Another way they lure you in is with below market rent and then eventually raise it until you can't pay so they can evict you. Get the picture? Their goal is to evict you. That's why this option is illegal in many states.

Scam #2: I can stop foreclosure for a fee
This is another popular one.  Another unscrupulous investor type knocks on the door with some official looking forms and tells the homeowner they can stop their foreclosure for a fee.  The fees have been ranging anywhere from $500 - 2500.  So many people have fallen for this and actually thought they were out of foreclosure.  That is until the Sheriff showed up and evicted them after their house was sold at the auction. Nobody can stop your foreclosure for a fee.  Ofcourse, this is illegal too.  In fact, as a result of this scam Florida enacted a new law that now makes it illegal for anyone (except an attorney) to charge a homeowner in the foreclosure process an upfront fee for foreclosure related services.


Scam #3:  I will pay full price
An unscrupulous investor approaches the homeowner and agrees to buy their house at full market price and sets the closing date 1-2 days before the auction.  The homeowner thinks they are going to net a sizable amount at closing.  Unfortunately, at the closing table the investor now says he is only willing to pay whatever you owe on the property.  Now your stuck.  You either sell it and get nothing or you lose it to foreclosure and get nothing.  There is a twist to this scam where the investor agrees to buy your house at full price less repairs.  Sounds fair, doesn't it?  Except at the closing table you are presented with a list of repairs (most of them bogus) all at outrageous amounts which is designed so that you net almost nothing from the sale and the investor gets a great deal. Since you don't have time to find another buyer, you end up selling to the scam artist or lose it to foreclosure.

Scam #4:  Just sign here
In this scam an investor poses as a foreclosure rescue consultant.  They show you a list of services they provide usually for a fee sometimes for free.  All you have to do is sign on the dotted line so they can begin working with you.  What you didn't realize is that you just signed a quit claim deed giving away your house to the investor.  Many unsuspecting homeowners actually gave these people a check and their house!  As you might expect, nobody got rescued.

Now you know some of the common scams to avoid.  If you believe you are being scammed you can contact your state's attorney general's office.

HomeplexNation offers free assistance to homeowners.  We can help you understand the foreclosure laws of your state and explain your options. If you need to sell, learn about our TRUEoffer^tm. Click here to learn more.