Stop Foreclosure and Avoid Foreclosure Scams

In September, foreclosure rates were up 46% in Washington over last year at this time. As more people are faced with this difficult Report Scam and get your money back, I guess it is inevitable that more and more con artists will emerge to try to take advantage of those in this vulnerable position.

This article will look at some of the most common scams encountered by homeowners who are faced with foreclosure, and will provide some simple rules to follow that will allow you to outwit the con artists, and save your home. In this scam, someone tells you that you should sign over your deed (commonly known as a “quit-claim” deed) to them, to be held in escrow. Then they will have you take out short term loans, and have the proceeds wired to their own accounts.

To make matters worse, the foreclosure “consultant” will promise to renegotiate the homeowners debt, and/or prevent the foreclosure. These “consultants” have the homeowner pay them some combination of an up-front fee, a monthly fee, and/or “rent.” The promised foreclosure relief and debt renegotiation never takes place.

Scam #2. The “Bankruptcy/Foreclosure” Scam According to the U.S. Department of Justice, this is the most common foreclosure scam on the West Coast. The con artist says they can save the homeowners house for a fee of several hundred to a few thousand dollars a month. They have their “clients” sign the bankruptcy forms and tell them they will be working on their behalf, often stating that they will pay the mortgage payments out of their fee. The “client” doesn’t question the actions of the consultant, because, for a time, the foreclosure is automatically postponed by the initiation of bankruptcy proceedings, and the homeowners stop receiving collection calls and letters.

There are two variations on this scam. In the first, a new bankruptcy is partially filed for the homeowners. This automatically stops the foreclosure action. Unfortunately, the bankruptcy process falls through, as no one actually appears in court, and the house is foreclosed on. The second variation simply takes a partial interest in the home (remember: Don’t sign over your deed), and transfers that interest to an individual or business already involved in a bankruptcy. The partial interest may be transferred several times, up to a record 24 times in one case!

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