foreclosure scams

How to Avoid Foreclosure Scams

Foreclosures can feel foreign, intimidating, and overwhelming. While you are already particularly vulnerable, you may also encounter scams. This article will go over common foreclosure rescue scams, and what assistance to seek to avoid falling victim. Our Foreclosure Defense Attorneys have the experience you need to help prevent these scams. 

If you are facing foreclosure, you have enough going on. The last thing you should have to worry about is a foreclosure scam. Let our experienced Foreclosure Defense Attorneys help keep you from falling victim to these scams. Our attorneys have the knowledge you need to identify these scams and avoid them before it is too late. Submit a free consultation today to see how our attorneys can help assist you.

Given the current challenges American citizens are facing as a result of COVID-19, several legislative acts have been implemented throughout the United States and in the State of New York to address some of these challenges. As a direct result of the financial toll COVID-19 has placed on many New Yorkers, Governor Andrew Cuomo of the State of New York signed an Executive Order extending foreclosures through May 1, 2021. Additionally, the President of the United States issued an Executive Order to minimize residential foreclosures during the COVID-19 national emergency. 

How Do Foreclosure Scams Work 

Foreclosures put people in vulnerable positions. On top of everything else going on, there are scams. Fraudulent foreclosure-related companies are waiting to take advantage of your position. It is important to check and ensure they are not a fraudulent company. 

How Do Foreclosure Scammers Find Their Targets

The lender for your property will file a foreclosure notice with a public trustee. Once this is done, the public is put on notice about the foreclosure. These are often listed in your local newspaper or other public sites. Foreclosure scammers know how the system works, and they are keeping an eye out for new people to prey on.

Warning Signs of a Foreclosure Rescue Scam

A scammer may offer to help you with financial predicament, or “rescue” you. These scams can take many different forms.

Once these scammers identify you, they advise you to stop communicating with others, including lenders, attorneys, and other professionals. They will convince you to let them take care of your situation. This puts a block between you and those who can actually help. 

Scammers profit off vulnerability. In foreclosure situations, they may profit by:

  1. Charging you a fee 
  2. Interfering with direct mortgage payments
  3. Deceiving you to the point that they assume ownership of your property before selling it

The Most Common Types of Foreclosure Scams 

There are several foreclosure scams and foreclosure phone call scams to know about. Protect yourself by talking to a professional who knows how to identify pre foreclosure scams and stop foreclosure scams in their tracks. Our foreclosure defense attorneys can help. Submit a free consultation form today.

Rent-to-Buy Schemes 

A homeowner relinquishes ownership with the belief they will rent for now and be able to buy the property back at some later point. These terms are often unfavorable, and the resale well above a fair price. The rental price may also continue to increase with time as well, and once a payment is missed, eviction may occur.

Balloon Payment

Balloon payments are larger payments that happen at once. They may be made to come due down the road and scammers can use them to their advantage. It is important to be wary of these schemes.

Phantom Help Scam

These scammers make it seem like you are on the same team, but instead, they may:

  • Block you from communicating with lenders
  • Require fees in advance
  • Charge you for access to free government sites 

Loan Modification Scams 

A scammer may claim they can negotiate a loan modification on your behalf. Specifically, that they will get you a better deal. However, these scammers often do not follow through with negotiating. 

Equity Stripping 

In these home foreclosure scams, a homeowner sells to a scammer and instead rents the property. Because ownership is relinquished, the scammer is then free to charge rent at a higher rate than the mortgage payments once were, leaving the homeowner vulnerable to eviction. The scammer then has the deed of the property.

foreclosure rescue scams

Equity Skimming

A scammer may offer to buy a property before it is foreclosed. The property is conveyed to the scammer as security on a new loan with the promise the property will be returned once cleared. However, the scammer will refinance, take out all the equity, and leave you with an even worse foreclosure situation. 

Bait-and-Switch

A homeowner is made to believe they are signing for a new loan which will allow them to keep the property and pay off past due mortgage payments. However, this is just a way for scammers to get access and payments. 

How to Avoid Foreclosure Scams

The best way to avoid these foreclosure scams is to get advice from a trustworthy professional. Our foreclosure defense attorney’s know how to protect you. Submit a free consultation form today to get started. 

What to Do If You’re a Victim of a Foreclosure Scam 

You may still have time. Get the advice of a professional who can assess what has transpired and if they can help resurrect your situation. You can also report the scam to state officials. 

Where to Get Legitimate Help with Foreclosure 

Certain professionals and state or local government programs may be able to help you with your foreclosure. However, you may want more specialized help. Our foreclosure defense attorneys are standing by to help assist you with your foreclosure. Submit a free consultation form today to get started. 

FAQ 

Do mortgage lenders lie?

It is more often the case for mortgage lenders to use ambiguous statements that are deceiving in nature, and in turn feel like a lie.

Can I trust a mortgage broker?

They can do a lot to assist you, but their interests may not directly align with yours.

Can the bank foreclose if you’re making partial payments?

It depends on whether these are accepted by your lender.

Can they garnish your wages for a foreclosure?

They can, but there are some requirements to fulfill beforehand.

How bad is foreclosure?

They are uncertain and put homeowners in a vulnerable state. If you can get professional advice, you will see how many options you have.

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