With the recent announcement by the Federal Reserve regarding increased interest rates there has been a rise in real estate scam artists attempting to make money off of homeowners who are struggling to make mortgage payments.
Today, Better Business Bureaus in the U.S. and Canada issued an international alert to help combat the growing incidences of real estate fraud.
“Foreclosures have increased 33 percent in the past few months and with foreclosures being public record scam artists often bombard at-risk homeowners with offers through mail, over the phone or flyers tacked on telephone poles,” said Chris Coleman, President of the Better Business Bureau of Greater Iowa. “There are a lot of smooth talking salespeople out there eagerly promising to ‘save’ your home.”
There are numerous situations that real estate scam artists can manipulate ranging from deceiving a homeowner into signing papers that are believed to be a reverse mortgage to the scam artist even offering the homeowner to “buy” their property when they are facing foreclosure.
“It’s understandable that people panic when facing the loss of their home. Yet this is a situation that calls for clear-headed thinking. The BBB urges homeowners who are in financial distress to explore every alternative to keeping their home and avoid falling victim to ‘easy’ solutions,” said Steve Cole, President and CEO of the Council of Better Business Bureaus (CBBB).
Most importantly to avoid contact with scam artists the BBB suggests homeowners talk with their mortgage lenders and address any delinquency letters received. By contacting your lender and explaining your situation you may be able to restructure your loan payment and refinance or extend the term of your mortgage loan.
If discussion with your lender is not productive the BBB suggests selling the house on your own to pay the mortgage or to use services by a reputable licensed real estate agent. If doing business with a “home buying service” check with your Better Business Bureau, Attorney General and Real Estate Commission to ensure the buyer’s expertise and reputation in the marketplace.
“By working with known and reputable agents, troubled homeowners can avoid getting into more problems than they may already be in,” said Coleman. “Otherwise the homeowner could lose their equity and their home.”
The BBB offers the following tips for homeowners whose mortgage is in arrears or who are facing foreclosure:
o Read everything before you sign and get all “promises” in writing. Some schemers will offer to complete paperwork for you, or ask you to sign a stack of documents, supposedly to secure a new mortgage. Victims later learn that they signed a quit-claim deed to their home.
o Beware the personal approach. Some less-than-ethical businesses will stuff a handwritten note in your front door or mailbox that implies that “help” is available from someone you know or who has your interests in mind. Foreclosure scam artists know exactly what neighborhoods to blanket with their offers.
o If a foreclosure “rescuer” or mortgage “broker” instructs you not to contact your mortgage company or your attorney, be wary. Your mortgage company is the very business that you should be in touch with! Furthermore, why would you agree to cease contact with your attorney?
o You should never sign a contract under pressure and never sign away ownership of your property. Remember, signing over your deed to someone else does not necessarily relieve you of your obligation on your loan. Ask a trusted family member, your attorney or a financial professional to review any paperwork you are asked to sign.
o Before agreeing to any deal with a business or firm to buy your home, contact your BBB to request a report on the company and check with your state Attorney General and state Real Estate Commission.
For further information contact your Better Business Bureau at 1-800-222-1600.