FORECLOSURE SCAMS

There will always be someone who wants to take your money and there is nothing wrong with spending money in exchange for worthwhile goods or services, but this page is dedicated to pointing out some examples of things to be cautious about. Facing the threat of losing a home, a home owner will be plagued by individuals and companies offering to "help" the person out of his or her difficult financial situation. In most cases, these people are out for one thing--making money from someone's problems.

In Foreclosure Scams these scams will come in many shapes and varieties...ranging from direct mail offering to "negotiate" on behalf of the home owner for a nominal fee to people knocking on the door offering to help out by reinstating the loan, taking title and leasing the home back to the individual. People facing foreclosure are vulnerable to con-artists and scams. However, using a little common sense any home owner can avoid being taken advantage of and find a viable and ethical solution for his or her dilemma. Think twice before embarking on a plan and think very long and hard before signing anything. If you are considering selling your property, get a Realpro Agent to do a Comparative Market Analysis. It's free, and you'll have a good idea of the value of your home.

1. We'll save your credit. Pay us a fee and sign the house over to us. The foreclosure will be recorded against us, not you.......Wrong!
The foreclosure will be reported against you, the borrowers, on the note, not anyone else.

2.Investors Trying to Take Your Equity.
We'll give you some money, just sign the house over, we'll cure the default.Many Investors aka the I/We Buy Houses people approach home owners facing foreclosure and try to take their home and equity without offering any other assistance. An ethical person would not simply just take your equity without trying to exhaust every effort to help you save your home and equity. These unethical people have no other answers for you other than taking your home and are just trying to make money offer your problems. There really isn't a problem with it, IF you know how much equity you are selling and IF the purchaser really will cure the default and IF the purchaser will really make the payments and IF you want to still be responsible for the loan. Too many IFs. Don't do it.

In California there are very explicit laws that must be followed if you are approached by an "Equity Buyer". These laws were first enacted in 1979 and continued to be revised as late as 2006. Know your rights before entering into any equity transaction. Read about your legal right here and/or consult a professional.

3. Debt Negotiating/Counseling Agencies.
Many companies, reputable and not-so-reputable, offer to negotiate or consolidate the debt for the home owner. The catch is that the home owner must prepay for these services (many the home owner can do on his or her own accord). These individuals do not offer anything that you cannot do on your own or that other non-profit agencies will provide free of charge.
If you need a debt negotiating agency, contact at (951) 686-7000 or Contact a HUD-approved housing counseling agency.

4. We'll buy the property, lease it to you, you have the option to buy it back.
It might have happened, but the reality is, to buy it back you'll need a new loan that's larger than the loan you have with an interest rate greater than what you have. The payments will be higher and it's going to be very difficult to qualify. Explore a small hard money loan if you have the equity or consider an open market sale, you'll probably end up with more money in your pocket.

5. We'll get you a new loan and solve all these difficulties.
Every time you refinance, unless you are paying fees out of pocket, your loan balance is going up which is using up your equity. Lenders can make a lot of money churning loans, you need to consider total loan amounts also, not just the monthly payments. Try to solve the problem, not just extend the time frame.

6. Short Term Loans.
People may approach financially troubled home owners with the possibility of lending him or her a short term loan, and in some cases offer a loan with no payments for a certain period of time. These loans have high interest rates, require a balloon payments (where the home owner must pay off the loan by a certain date), or other features that may sound attractive. In reality, these loans are additional liens against a home and if the home owner fails to make a monthly payment or the balloon payment, the home owner could face foreclosure again.

7. I'm an agent specializing in pre-foreclosures and I'll get your property sold quickly for top dollar.
Some agents have a relationship with an investor and work from published Default notices. You'll get an offer, but is the the best? We've seen listed properties in foreclosure receive higher offers with no contingencies and the capability for quick closing that aren't always accepted by sellers. Why? Most likely, because they are never presented to the seller. Be cautious of unethical real estate people and use a Realpro Agent to give you a FREE Comparative Market Analysis and to discuss your particular situation:

8. Unethical Realtors
Trying to Take Your Equity. Real estate agents (many claiming to be "pre-foreclosure" specialists) offer reinstate a person's loan and sell the house with the idea of salvaging any accrued equity and appreciation in the home. The catch is that the home owner must split the earnings with the agent instead of paying a commission. The reality is that the home owner could have hired a competent agent and accomplished the same end result with less money out of pocket. We at Realpro believe that selling your home is the last resort if all other methods of trying to keep you in your home fails, Selling your home may or may not involve a SHORT SALE(when the mortgage is greater than the value of the home) and will require the skills of professionals such as who have been involved in these types of sales since 1991

9. Stop Foreclosure with Bankruptcy
Bankruptcy does NOT STOP foreclosure. It puts a hold on foreclosure which can allow you time to reorganize your finances. Every area has reputable attorneys who handle bankruptcies. Spend the time to find one and spend the time to know what you have to do and when. Mistakes can cause things to get very bad very fast. Do you want it done right, or do you want it cheap? SEE BANKRUPTCY SCAM

10. Real Estate Scams
The most common scam happens either during or after the foreclosure. Person breaks in to a vacant house, changes the locks and then rents the property out. When a property is advertised at below market rent, the phone number is voice mail and the "landlord" wants to meet at a restaurant or other public place, it's quite likely a scam.

Another variation on this same theme is a person giving an owner in foreclosure a cash amount for the equity in the home. The small cash payment gains control of the property which is then rented out with no payments made to the lender. The "landlord" pockets any rents received while delaying the foreclosure as long as possible.

11.Beware of Visitors.
Expect many people, including investors and real estate agents, to visit your home. They will paper your house with flyers, knock on your door at all hours, and stalk you and your family until they have an opportunity to speak with you. The worse perpetrators are individuals posing as government employees dispatched to your home to assist you.
The lender, the County, and the Federal government will not send out personal representatives to assist you unless you have initiated the call to the right agency.

12. “Financial Services” Companies.
There has been a proliferation of individuals, often posing as a financial services company, that offer to assist home owners facing foreclosure with everything from tax advising, debt management, real estate sales and pre-foreclosure sales. The reality of these individuals is that they do not run legitimate corporations (according to the Corporations Commission of many states) and are not legally licensed as required by the State Banking Department for debt or credit counseling. Be wary of anyone who charges for their services upfront!

There is one person in this world who has your best interest at heart. It's you. You have to be careful, think about the services promised, and determine whether the promises are real or just another way of separating you from your money. Think, compare, research and you should be fine.