Are You in a Pickle and Need Advice About Loan Modifications?
The other day, my wife and I ate lunch at a local sushi restaurant where the sushi chef misspoke. He asked me if I wanted an order of scams (instead of clams). Of course, I graciously declined, but almost every day it seems like I hear about another real-estate-related scam. Who knows? Maybe there are as many varieties of scams as one could order in a sushi restaurant! If so, here are three categories:
Invisible Assistant:
The scam artist pledges to the homeowner that for a fee, he will be able to cut the owners payments by a third. Then after taking the owners money, the scammer vanishes like a waiter in an expensive restaurant – never to be seen or heard from again.
The Rescuer Technique:
The homeowner is saved from his dilemma by the generous helper who offers to bail him out. Often the helper needs to take title to the property in order to modify the loan, and promises to lease the property back to the homeowner. Then when the owner is able to purchase, he will be able to purchase the property back again. Sounds good, right? Usually the scammer ends up not honoring the agreement, and simply kicks out the owner. Or the helper rents out the property until it is foreclosed upon and keeps all the rent receipts for himself.
Bait-and-Switch:
In this scenario, the homeowner is usually persuaded to do one thing but ends up doing another – like signing a deed and giving up his interest to the property. For example, the scammer might tell the homeowner that he needs to sign a power of attorney to negotiate with the lender to do a loan modification. Then after signing it, the helper uses the power of attorney to evict the owner from the property and rent it out.
Obviously, there are hundreds of scams, these are just the three main categories. Other categories might include identity-theft, loan fraud, and even elder abuse. How do these scam artists find their victims? Sometimes owners call helpers or visit internet website. Some scammers post signs on telephone poles like We Buy Homes or Stop Foreclosure Now.
If you are concerned about a loved one working with a foreclosure helper, some tell-tale signs to watch for include: if a helper asks for payment only in the form of cash, cashiers check or wire transfer — beware. If a helper asks you to transfer title or your interest in the property– beware; or if a helper makes an guaranteed promise to stop foreclosure or other assurances–beware.
Just as one Dad was wise to do a Google search for delicious dinner recipes; when it comes to foreclosures, short sales and loan modifications, you might wish to check online and do some homework to help you too!
