What are foreclosure scams?

If you need to sell your home to get out of debt or avoid foreclosure, you should make sure to avoid foreclosure scams. These scams are most obvious because they offer to help you get out of your home easily without any kind of repercussions. They sound far too good to be true, and they typically are too good to be true.

One common foreclosure scam to watch out for is the balloon payment scam. This scam focuses on the fact that you have missed payments and may be facing foreclosure. Another lender then offers to refinance your mortgage and to lower the payments you make each month. Don’t jump onto that new contract without having your attorney review it with you. If it’s a balloon payment scheme, you are only paying interest and will be expected to pay the home off in full in a lump sum at the end of the loan’s term.

Another thing to avoid doing without your attorney’s input is signing over your deed. No lender or potential buyer should ask you to sign over the deed without placing funds for the purchase of the home in escrow. If you fall into this trap, the person you sign over the deed to now owns your home and can force you out if you fail to make rent payments. Essentially, you gave the other party your home.

Scams like this can make it hard to know what to do if you face foreclosure. Fortunately, your attorney can help you understand the options you have, so you don’t face trouble that requires real estate litigation.

Source: FindLaw, “Watch Out for Foreclosure Scams,” accessed June 15, 2017