At a recent office meeting our broker pointed out that he’s hearing more and more about scams involving people preying on homeowners in foreclosure.
One of the methods is for someone to approach a homeowner who is facing foreclosure, and make an arrangement in which the owner signs their home over to them via a quit claim deed. The expectation is that this person will take over the payments and the owner will lease the home for an affordable amount, with the option to purchase it back in the future.
Instead, the new owner charges an exorbitant amount for the new lease, or worse, simply sells the property. Most home mortgages also have a clause stating that if you transfer your property to someone else the entire balance of the loan may be due immediately. If a homeowner is in pre-foreclosure, violating this clause may invalidate the normal waiting time frames and speed up the foreclosure process.
Bottom line? Homeowners facing foreclosure should call their lender directly! (The lender, not any intermediary collection service.)
This HUD page also offers some good tips on avoiding foreclosure.
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