Unfortunately there are those in our society that believe that it is okay to swindle people, especially desperate people. I am going to list the most common scams that are being sprung on distressed homeowners. This is not a comprehensive list as new scams pop up daily. Some of the most successful scams are those that are extremely similar to actual solutions, so be careful and verify everything.
Here they are:
Bailout: This is the scenario in various versions of the same scam. Basically the homeowner surrenders their title to their home in hopes of being able to stay in the home as renters with the hope of being able to buy the home back.
Bait and Switch: The homeowners believe that they are signing papers for a new, more affordable loan, but they are really signing away any ownership they have in the home, and they are still stuck with the original mortgage payment.
Equity Stripping: A buyer purchases the home for the balance of the late payments, then turns around and flips the home for a quick profit.
Foreclosure Scams: They offer the homeowner fraudulent programs that make the homeowner think that they have worked out a solution for the homeowner. The reality is that all they have done is taken the homeowner’s money, and left the homeowner with false hope.
Phantom Help: This is simply charging the homeowner a lot of money to do things that the homeowner can for themselves.
Straw Buyers: This occurs mostly in Short Sale situations. The real estate agent submits an offer for an Unnamed Person in order to stall the foreclosure sale of the house by the bank. The unnamed person then doesn’t follow through with the purchase. The FHA recognizes this and flags the property, it then becomes very difficult to get an FHA loan on the property.
This is a very small list, I am sure that there are dozens more that I haven’t heard about. The point of this post is to have you verify everything someone promises. Check with your local government offices to find out if these individuals are legitimate. Don’t send anyone money before checking them out!