Foreclosure Scams
Please read the report below in its
entirety,
become familiar with your
options
and arm yourself with this
valuable information.
If you suspect someone’s been less than forthright about your options,
guess what? You're probably
right.
The IAFPP wants you to be
aware
that there is good and bad
information out there.
You are undoubtedly (or soon will be)
being bombarded with a bunch
of misleading information,
confusing claims,
and bold faced lies on a daily basis.
You should protect yourself
from;
Here’s what you
should know now…
Arm yourself with
education.
Read the following
scams,
so you will protected against
them
Also read the
'Questions to Ask'
section
for questions to
askindividuals
and/or companies thet you
speak with,
about helping you in your situation.
Most Current Real Estate
and Foreclosure Scams
The most common scams happen either during or after the
foreclosure.
A person breaks in to a
vacant house,
or gets the homeowner to
leave the home
under some pretext of helping
them out of the foreclosure,
changes the locks and then
rents the property out.
When a property is advertised at below market
rent,
the phone number is voice
mail
and the 'landlord' wants to meet at a
restaurant
or other public place,
it's quite likely one of the
many scams.
Another variation on this same theme
is a person giving an owner
in foreclosure
a cash amount for the equity
in the home.
The small cash payment gains
control of the property
which is then rented out with
no payments made to the lender.
The 'landlord' pockets any rents
received
while delaying the foreclosure as long as
possible.
Other Known Foreclosure Scams
1. We'll save your credit.
Pay us a fee and sign the house over to us. The foreclosure will be recorded against us, not
you.
WRONG
The foreclosure will be reported against the
borrowers on the note, not anyone else.
2. We'll give you some money, just sign the house over, we'll cure the default.
WRONG
CAUTION:
There really isn't a problem with this,
IF you know how much equity you are selling and IF the purchaser really will cure the default
and IF the purchaser will really make the payments and IF you want to still be responsible
for the loan.
Too many IF's to be able to say this is either a good or
bad option, just be careful with it.
3. We'll buy the property, lease it to you, you have the option to buy it back.
WRONG
It might have happened, but the reality is, to
buy it back you'll need a new loan that's larger than the loan you have with an interest rate
greater than what you have. The payments will be higher and it's going to be very difficult to
qualify. Explore a small hard money loan if you have the equity or consider an open market sale,
you'll probably end up with more money in your pocket. Also it is against the law in many cases
in Illinois.
4. We'll get you a new loan and solve all these difficulties.
WRONG
Every time you refinance, unless you are paying
fees out of pocket, your loan balance is going up which is using up your equity. Lenders can make a
lot of money churning loans, you need to consider total loan amounts also, not just the monthly
payments. Try to solve the problem, not just extend the time frame.
5. I'm an agent specializing in pre-foreclosures and I'll get your property sold quickly for top
dollar.
WRONG
Some agents have a relationship with investor's
and work from published Default notices. You'll get an offer, but is it the best? We've seen listed
properties in foreclosure receive higher offers with no contingencies and the capability for quick
closing that aren't always accepted by sellers.
Why? Most likely, because they are never presented to the
seller.
6. Stop Foreclosure with Bankruptcy
WRONG
Be very Careful here...Bankruptcy does Not Stop
foreclosure. It puts a hold on foreclosure which can allow you time to reorganize your finances.
Every area has reputable attorneys who handle bankruptcies. Spend the time to find one and spend
the time to know what you have to do and when. Mistakes can cause things to get very bad very
fast.
Do you want it done right, or do you want it
cheap?
There is only one person in this
world
who has your best interest at
heart.
It's you.
You have to be
careful,
think about the services
promised,
and determine whether the
promises are real
or just another way of
separating you from your money.
Ask Yourself These Questions
If you are saving my house
from foreclosure,
why do you want me to sign
the deed over to you?
Remember that the deed is the ownership of the
property,
it has nothing to do with the mortgage.
When you sign over the deed,
you are still solely responsible for the mortgage.
Don't Do It!
If someone is truly saving
your home,
they don't want or need to
own it.
If you are buying my
home,
whether
conventional
or negotiated (a short sale -
less than what is owed),
why do you want me to sign
over the deed now?
Don't Do It!
The deed will transfer at
closing...not before.
There are reasons
that
your house may be placed in a
Land Trust
that are justifiable to make
a deal happen,
YOU should be 100% beneficiary of the Land
Trust.
Do NOT assign your beneficial rights
until you understand the
entire process
and any assignment of your
beneficial interest should be escrowed.
This will protect you and if
the deal falls through,
you maintain 100% beneficial
interest.
Think, compare, research, ask
questions, and you should be fine.
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