Foreclosure "Rescue" Scammers Focus on Stealing Homes
These criminals skip over foreclosure notices on newer homes with sub-prime loans and mortgages made with low down payments or none at all.
They are looking for foreclosures on homes with loans that are a decade old or more, those that have a nice buildup of equity. They arrange to get that equity for themselves.
Though there are legitimate, mostly nonprofit, operations that can help homeowners in distress, there is a growing army of criminals that prey on this group.
They get leads from sites such as PreForeclosure.com and All-foreclosure.com. The sites compile public records to provide leads for legitimate investors, but anyone can access them. People on the list say they receive letters daily that offer to help them avoid foreclosure.
Here's how the scam works. Rescuers say they will refinance through a designated investor or arrange a rent-to-own plan that will allow homeowners to buy their homes back. Somewhere in the paperwork, there is a quit claim or deed of gift in which homeowners sign their houses over to the investor.
At that point, the rescuers charge the former owners rent high enough to ensure they can evict them and pocket the equity built up in the property.
The rescuer may also take out a first and second mortgage on the property. If the former owners do get the property back, what they owe on it could be more than the house is worth.
Several states have passed foreclosure protection laws, but its still up to individuals to protect themselves from scam artists. |
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