Unexpected financial problems, such as unemployment or extortionate medical bills, can adversely affect a homeowner’s ability to make their mortgage payments. Foreclosures happen when an individual falls too far behind, prompting the lender to repossess the property. Homeowners who are facing foreclosure have a few options to save their homes or, at least, minimize their losses.
The rising foreclosure rates today have also led to the rapid increase of bogus companies calling themselves foreclosure specialists or consultants. Scammers like to prey on the vulnerable, and it’s no surprise that there are so many of them targeting homeowners in distress.
Here are some tips to help you spot and avoid foreclosure scammers in Jacksonville:
Recognize the Red Flags
Here are some of the obvious signs that you’re dealing with a scam artist:
- They pressure you to sign documents or contracts without giving you enough time to read them.
- They ask you to refrain from contacting an attorney, a real estate agent, or your lender.
- They instruct you to send them your mortgage payments instead of to your lender.
- They require an upfront payment for their services
It is possible to stop the process of foreclosure. However, there are no easy fixes, and you should be wary of anyone claiming they can offer relief right away.
Beware of the Common Scams
Scammers use so many methods to swindle unsuspecting homeowners. Here are some of them:
- Equity Skimming: The scammer will promise to stop the foreclosure as long as you temporarily transfer or sign over the deed. They’ll claim that you can get the home back from them after a year, and they’ll continue making the mortgage payments on your behalf during this period. They’ll then rent the property out but, contrary to their promise, they’ll make no effort to make the monthly mortgage payments.
- Phantom Counseling: The scammer will promise you that they’ll negotiate with the lender to reduce your mortgage payment in exchange for paying them a fee. They may even ask you to send them your mortgage payments while negotiations are ongoing.
- Lender Scams: Some predatory lenders will offer to refinance your loan with lower monthly payments. However, you’ll soon realize that you’re only paying for the interest and that, at the end of the term, the principal is still due as a lump sum balloon payment.
- Forensic Audit: The scammer will claim that they’re an auditor who can assess your mortgage documents and check if the lender is compliant with the law. They’ll charge you a fee in exchange for a bogus report that you can supposedly use to negotiate better terms for your loan.
- Bogus Rent-to-Buy Scheme: The scammer offers to buy the house, and lets the homeowner stay in the property, in a rent-to-buy scheme. However, the terms of this buy-back deal will be unfavorable to the other homeowner. The scammer may even jack up the rent over time to force the original homeowner to vacate the property, leaving the scammer free to sell the home.
Know Your Rights
Here are some key things to remember when you’re dealing with companies that promise to provide foreclosure relief or mortgage assistance:
- You don’t need to pay until the company delivers on its promises.
- The company is legally required to disclose relevant information. They can’t stop you from contacting your lender.
- You can contact a lawyer to review any documents they ask you to sign.
If you suspect that you’re being scammed, file a report with the Federal Trade Commission.
Find a Reliable Cash Buyer
Always know who you’re dealing with. Make sure that they’re a licensed and certified company by doing your research. If you decide to sell your home and cut your losses, find a reliable cash buyer who won’t take advantage of your situation.
Orbit Properties can help! Contact us now to get a fair price for your home in Jacksonville. We will buy your home for cash fast, so you can quickly move forward with your life.