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Like many things out there, there
will be people waiting to take advantage of you. The best way to
prevent such things from happening is to arm your self with
knowledge. Scams with Foreclosures are no different.
Below are some common scams you might encounter:
Phantom help: The "rescuer" charges outrageous fees for
light-duty phone calls or paperwork that the homeowner could easily
do, none of which results in saving the home. This predatory scam
gives homeowners a false sense of hope and prevents them from
seeking qualified help.
The bailout: In this scam, the homeowner is deceived into
signing over title with the belief that he will be able to remain
in the house as a renter and eventually buy it back over time. The
terms of these scams are so onerous that the buy-back becomes
impossible, the homeowner loses possession, and the "rescuer" walks
off with most or all of the equity.
The bait-and-switch: In this scam, the homeowners think they
are signing documents to bring the mortgage current, but instead
actually surrender their ownership. They usually don't even know
they've been scammed until they're evicted.
Follow these tips from the National Consumer Law Center to help
prevent these scams from happening to you:
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Don't panic. Get detailed
information about the deadlines you face in resolving your
problems. Pay special attention to the date on which you would
lose legal right to ownership.
Never sign a contract under
pressure. Take your time, and consult a lawyer if possible.
Never sign away ownership via a
quitclaim deed or other means without consulting a lawyer. Be
especially suspicious of offers to lease back your home, in
order to buy it back over time. These offers are weighted
against you.
Never make your mortgage
payments to anyone other than your lender. If you can't pay, do
not ignore warning letters from your lender; contact them
instead.
Beware of any home-sale
contract in which you are not formally released from liability
for your mortgage. Make sure you know the rights you are giving
up and that you agree to give them up.
Don't sign anything with blank
lines or spaces; information could be added later without your
knowledge and consent.
If you do not speak English,
never use a "rescuer's" translator. Instead, insist on using
your own translator.
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Source: National Consumer Law Center
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