Mortgage foreclosure scam is one of the most popular fraudulent activities of today. It is vicious and cruel, sinking people into a more difficult situation.
People who call themselves the foreclosure rescue agents, create a scam. They have a systematic process to convince vulnerable homeowners that they can help them with their mortgage problems. The desperate ones are most likely to agree.
These so-called agents apply various tactics to make them more convincing. They pretend to be the good guys, bad-mouthing mortgage companies and guarantees relief from foreclosure. You may think that this is all so surreal but many people have been victimized with these tactics.
Working out the Scam
So here’s how a usual foreclosure scam goes. First, scam agents have to find their prospects by getting the information of the people who are listed on public foreclosure notices or city courts. Then they communicate with the homeowners through email, letter or by phone to offer their services. They make offers like paying their delinquent payments and promises to help them get their houses back. They will also make the offer look good by allowing homeowners to rent their property while the so-called relief process is ongoing.
To earn money, they will charge the homeowners with a professional fee. They will also make other charges for the fake transactions they claim they have performed. Paper works may be presented to make the transaction more believable, even though it is all bogus.
The homeowner may be asked to sign a quit claim so that the scam artist can proceed managing the property according to what they plan. But the real purpose of the quit-claim is for them to use the property as collateral to a loan that will be obtained by the straw buyer. The straw buyer will be paid for doing his part.
The loan obtained will not be maintained nor will the borrower have any intention to settle the debt. Bankruptcy may be filed to cause any delay. Moreover, this gives time for the scam agents to disappear in the scenario while securing the money for their own benefit. In the end, the homeowner may be in more trouble than they had before, foreclosure proceedings will be expedited and they also lose their equity from their home.
How to avoid being victimized
There are now laws to protect homeowners from scams like this. Although they created a list of prohibitions and guidelines for transactions like this, it is still up to the homeowners to save themselves from these kinds of scams.
It can be really tempting to bite on anything that comes along the way, especially during desperate moments. However, it is encouraged that homeowners do they research before accepting any offers. If they have not heard about the company before, it is better to check with the business bureau for their license to practice. Agents offering the services should be background checked. Moreover, any agreement should be in writing. And it is best to involved real estate agents or lawyers before you accept any offers.
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