Comments for Top 3 Foreclosure Scams To Avoid

Top 3 Foreclosure Scams To Avoid

2008-11-26T00:29:53Z

With so many people facing foreclosure these days, it's a good idea to educate yourself about the types of scams that take advantage of folks who are having trouble paying their bills. Even if you are doing ok, perhaps you can help someone else by recognizing a scam.

The FTC lists the top 3 foreclosure scams to be aware of as the housing crisis deepens.

Top 3 Foreclosure Scams To Avoid

The foreclosure prevention specialist: The �specialist� really is a phony counselor who charges outrageous fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions results in saving the home. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.
The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the �rescuer� walks off with most or all of the equity.
The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don�t know they�ve been scammed until they get an eviction notice.

(Photo: Getty)

Comment from ViperBorg on 2008-11-26

2008-11-26T22:22:36Z

@HogwartsAlum: To quote from the movie Boondock Saints:

*burst in the door*
"Pack your s**t! Pack your s**t! You start gettin' excited m**********r, we gotta go!"

Damn, I love that movie.

Comment from HogwartsAlum on 2008-11-26

2008-11-26T20:46:30Z

@InfiniTrent:

I mean if you accidentally messed up and didn't, what would you do. I guess you'd be screwed.

Comment from SugarMag on 2008-11-26

2008-11-26T20:16:45Z

Are there any legit "foreclosure prevention specialists"? I saw an ad/webpage recently for a company that does as such and I couldn't find anything obvious that would make it seem scam worthy. (I'm admitting my ignorance here)

Comment from ZenMasterKel on 2008-11-26

2008-11-26T19:51:52Z

@Maglet: It's called an equity stripping scheme. It's not that easy to do now, since most people in foreclosure don't have any equity, and lenders are scrutinizing the appraisals much more closely.

Comment from ZekeSulastin on 2008-11-26

2008-11-26T18:36:33Z

@Corporate-Shill: ... except I thought that Google would automatically decide what ads to run on a given site based on keywords on the page in question? It's the same on any site; many make light of the irony of the ads relative to the content.

Comment from Anonymous on 2008-11-26

2008-11-26T11:05:17Z

@SamDFA: Actually, that scheme drifted to the South suburbs with many rent-to-own 'programs' being sold.

100% financing was not easy to get in this area until 2004. We had plenty of gurus selling rent-to-own kits to retirees and low income buyers.

Comment from godlyfrog on 2008-11-26

2008-11-26T07:11:54Z

@monkeytown: Sadly, most of the people who are desperate enough to fall for these things are the same ones who didn't do their research when they bought the house and got in over their heads to begin with, so the common sense argument flies out the window.

Comment from Corporate-Shill on 2008-11-25

2008-11-26T04:20:03Z

Considering the importance of this story, how about a rewrite and posting the story as a sticky?

If you protect just one consumer you have performed a commendable task.

Comment from Corporate-Shill on 2008-11-25

2008-11-26T04:18:24Z

@fashionista:

Worse, it shows how low The Consumerist will stoop to gain a buck.

Comment from failurate on 2008-11-25

2008-11-26T03:30:45Z

@fashionista: I think that pretty much demonstrates why The Consumerist is having trouble getting independent ad revenue.

Comment from fashionista on 2008-11-25

2008-11-26T03:11:01Z

Considering the article's subject matter, I am a little concerned by the Google ads in the middle of the page. I guess scammers gotta pay their mortgage too.

Comment from Red_Flag on 2008-11-25

2008-11-26T02:53:24Z

@SamDFA: I think you're right. Wow... it's been years since I read that book.

Comment from SamDFA on 2008-11-25

2008-11-26T02:28:11Z

The lease/buyback option sounds strikingly like what happened to the immigrants in "The Jungle" by Upton Sinclair. I will be betting on similar results for those who choose option 2

Comment from JayCutlerhurtsmyhead on 2008-11-25

2008-11-26T01:40:58Z

I hope the lease/buyback becomes popular. Some enterprising crook will be chuckling to himself about all of the people stampeding to take part. And at the end of the day he'll have all of their sweet, sweet debt.

Comment from TrueBlue63 on 2008-11-25

2008-11-26T01:30:37Z

That is why you need to hire a lawyer if you can't/won't read legal documents.

Don't tell me you can't afford one. You can probably get free legal aid in most places, or at the least, pay a law student to read it and explain it.

Comment from Traveshamockery on 2008-11-25

2008-11-26T01:27:04Z

@HogwartsAlum: Read before you sign. Buyer beware. And all that.

Comment from HogwartsAlum on 2008-11-25

2008-11-26T01:17:57Z

I've heard of the first one.

That last one IS scary. What would someone do in that situation?

Comment from Maglet on 2008-11-25

2008-11-26T00:57:42Z

I've heard of the other two, but that "bait-and-switch" is EVIL. How in the world is that okay? Sure, if you don't read what you sign, tough crap. But, holy hell... that's awful. There are plenty of people that can be easily tricked/persuaded.

After the eviction notice, then what? Is it all boxes and moving companies? LOL! Or do they get to fight back? Yikes... that's scary.

Comment from monkeytown on 2008-11-25

2008-11-26T00:56:42Z

As unfortunate as it is, if it sounds too good to be true, it probably is. In making decisions that can drastically effect your life, do your research! A few hours on Google is definitely not enough time, unless in that short time you see some serious red flags.