If you are falling behind on your mortgage payments, you may feel desperate for some help. Unfortunately, many scammers play on people’s desperation and if you are not careful you could fall victim to a foreclosure scam.
It is important to understand some of the most common types of foreclosure scams so you can avoid falling into a scammer’s trap.
Signing over the deed to your house
In this instance, a scammer poses as a lender and attempts to have you sign over your deed to him or her. According to FindLaw, the scammer may claim that this will prevent foreclosure or help you obtain new financing.
Once you sign over the deed, the scammer technically owns your house. The scammer may sell the home and keep the money, or even borrow against it. Because you no longer own your home, you will have no legal recourse.
Skimming your equity
This scam involves a person who offers to either pay off your mortgage or give you a portion of the proceeds from the sale of your home. The scammer often encourages you to sign over the deed and move out hastily. The scammer will then collect rent payments from you but will not apply those payments to your mortgage. This scam usually ends in the foreclosure of your home, and you may still be liable for the loan.
If you encounter someone who wants you to sign over the deed to your home, or suggests that you move out quickly, you could be dealing with a scammer. It is important to refrain from signing any documents you do not understand and have a knowledgeable professional review them first.