It was only a matter of time before the news started surfacing about unsavory operations preying on foreclosure victims. That business is now in full swing across the land. As the housing troubles deepen, the legitimate, mostly non-profit, companies are forced to compete with the scam artists for the ear of the homeowner in distress. The one who is the most convincing gets to help, or to rip off.
The scammer's plan has one basic aim, get his hands on the homeowner's equity. To pull that off, his first job is to find a house against which a mortgage lender has filed a notice of trustee sale at a local court, the initial step in the foreclosure sequence. This information can be accessed at the courthouse or obtained from one of the many Internet firms that sell public data. And eventually he acquires a list with plenty of names on it.
Then, through tax records, he looks at how long a particular owner has lived in his house and if it's for several years, that's the one he chooses to target. This home most likely is carrying a large equity, in other words real money. Recently purchased or refinanced ones don't interest him because there is no equity or very little of it. Now the phone starts ringing at the delinquent property and the white knight makes his presentation about how he's going to help the owner work his way through this rough stretch in his life.
Generally, the rescue artist either offers to do a refinance or execute a lease option that would let the owner purchase the house back later on. The anxious homeowner agrees to do one of them. And now comes the final scam. More often than not, hidden in the pile of closing papers is a quit claim deed and the minute the owner signs it, the home belongs to the white knight. Done deal. Typically, the former owner can stay in the property, but the rent is by design so high that he can't cover it, gets evicted and the scammer grabs the equity for his troubles.
According to laws in most states, it's quite legal for one person to convince another to transfer his ownership over. The other thing is that when a crooked rescuer makes his promises, it's in most cases all verbal, so how do you prove deception in a court of law. The only legal route the homeowner actually can explore is through civil proceedings. Many states today are working on tightening their laws around this issue and hopefully they get it done sooner rather than later.
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Provided by:
Esko Kiuru
Mortgage and real estate market commentator
www.BluefoxToday.com - syndicated mortgage and real estate blog
eskokiuru@gmail.com
My cell: 702-499-1006
Hold on Bruce,
Esko is talking about something completely different. Not companies like Freedom or Titanium. The people he is speaking of are local investors who truly scam people out of their houses through unethical means. The true Loss Mitigation industry which I work in is legitimate and works as a broker betwenn the client and a Lender. The Scammers simply pull a couple of fast one's on the already troubled owner sometimes taking thousands of dollars as "lease Payments" only to be foreclosed on and out the cash as well
Esko,
Keep posting info like this agents need to understand this so they can advise clients or homeowners about these types of scams
It's so unfortunate that unsavory types put a cloud over the heads of legitimate companies who truly do have methods to help the consumer. Unfortunately the news media will only report doom and gloom and some people who could have been helped by honest companies will never get the opportunity simply because of what they have heard.
Bruce,
There are a lot of legitimate companies that offer honest service and help. It's the scammers we need to watch out for.
Paul,
Many of the legitimate firms are non-profit, so the homeowner could use that as a starting point when looking for help.
Shane,
Hopefully homeowners in a bind stay vigilant enough to avoid the scammers.
Kate,
It's true that the news media likes to focus on the gloom side of the story.