What does a homeowner scam look like?
Scammers are innovating frequently to stay ahead of law enforcement, regulations, and advocates. Some common types of scams we’ve seen in the past few years include:
Foreclosure rescue and refinance scams: Scam artists offer to negotiate with a homeowner’s lender on their behalf to obtain a new loan repayment plan or mortgage modification, often guaranteeing they can save a home from foreclosure. They may ask a homeowner to pay mortgage payments directly to them instead of a servicer. Those scammers typically pocket a homeowner’s money, putting them further behind on their mortgage.
Scam lawsuit: Scammers offer to bring a lawsuit on behalf of homeowners, promising they can get a modification or obtain a settlement from the homeowner’s bank. These lawsuits have no chance of success, but rather are used to charge homeowners a fee that the scammer can then pocket.
Debt-elimination scams: Scammers may try to convince homeowners that their mortgage or debt is illegitimate and that they do not have to pay it back. Scammers may make reference to inaccurate or “little known” laws or financial regulations to justify their services. However, the scammer often pockets any fees for her or himself.
Forensic audit scams: Scammers offer “auditors” or an attorney to examine a homeowner’s mortgage document to determine if the lender complied with the law, offering a report that they claim can help avoid foreclosure, obtain a modification, or even cancel a loan. They typically charge an up-front fee for this service without delivering results.
Fake government and bank modification programs: Scam artists create websites, brochures, or commercials that mimic legitimate programs and organizations. They are designed to make homeowners believe they are dealing with a legitimate program or their bank.
Leaseback and rent-to-buy scams: Scammers explain that a homeowner can get new and better financing if they sign over the title or deed, promising that the homeowner will be able to buy back the home. These agreements are often written so that it is hard for the homeowner to comply with the terms.
Deed fraud: Fraudsters will transfer the deed to a home, sometimes unbeknownst to the homeowner, to themselves or to a third party.
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