Beware of Foreclosure Rescue Scams
Beware of foreclosure rescue scams! Solutions that sound too simple or too good to be true usually are. If you're selling your home without professional guidance, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial difficulty.
Common Scams
- Equity skimming. This type of scam involves a “buyer” approaching you and offering to pay off your mortgage or give you a sum of money when the property is sold. The "buyer" may suggest that you move out quickly and deed the property to him or her. The "buyer" then collects rent for a time, doesn't make any mortgage payments, and allows the lender to foreclose. Remember that signing over your deed to someone else doesn't necessarily relieve you of your obligation on your loan.
- Phony Counseling Agencies. Some groups calling themselves "counseling agencies" may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself, for free, such as negotiating a new payment plan with your lender, or pursuing a preforeclosure sale. If you have any doubt about paying for such services, call a HUD-approved housing counseling agency. Do this BEFORE you pay anyone or sign anything.
Precautions You Can Take To Avoid Being Scammed
Here are several precautions that should help you avoid being “taken” by a scam artist:
- Don't sign any papers you don't fully understand.
- Make sure you get all the "promises" in writing.
- Signing over the deed to someone else doesn’t necessarily relieve you of your loan obligation. If your name is still included on the documents, you’re still liable for repaying the loan.
- Check with your lawyer or your mortgage company before entering into any deal involving your home.
- Check to see if there are any complaints against the prospective buyer if you’re selling your house. In addition to contacting DFI, you can contact the Washington State’s Attorney General’s Office or the Real Estate Commission for this type of information.
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