It’s a recession, we are all facing hard times and scam artists are NO exception. With news of millionaires tricking investors out of their hard-earned money and religious leaders creating fake charities so they can steal the contributions, it’s no wonder that the real estate scammers are coming out of the woodworks. Read on to learn about some scams that many of the nation’s homeowners are facing and how to make sure it doesn’t happen to you!
Did you know? Lenders file public notices of mortgage defaults. What does this mean? It means that is not difficult for people in the real estate industry to find people who are on the verge of losing their homes. Scammers will promise you that they have an established group of investors that will save your home by taking over ownership then renting it back to you. This way, they promise that you will be able to buy it back. This involves you giving up your deed. In exchange, you will be promised cash from the sale proceeds, lower monthly payments, a positive impact on your credit score and even the chance to earn “referral fees” from telling your friends about this great offer!
At this point, you’re thinking that this sounds good, right? WRONG! Here is where the problem is. These scammers make money by getting title to your house and depleting the equity by getting cash back at the end of the closing or by refinancing the loan. Even if you have NO equity, the right appraisal can result in the scammer getting cash at the sale. They will tell you that you can continue living in your home for low amounts of rent. But, what happens is that your mortgage does not get paid, you have given up your deed and the lienholder (the bank) will foreclose and evict you but the deedholder will be able to keep his deed!
This is just one example of a common scam that happens to innocent homeowners every day. Here are some tips so you can make sure you never find yourself the victim of this kind of scam:
Never agree to any kind of loan if you cannot afford the monthly payments.
Always demand an explanation of anything in a written contract that you do not understand.
NEVER give personal information to a person that comes to your door. If he/she is legitimate, he/she will be more than happy to set up an appointment with you where you will have time and the ability to do some research before discussing ANYTHING with him/her.
NEVER sign any document that you have not read OR that has blanks in it and ALWAYS keep a copy of everything you sign.
