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In times of high vulnerability, scam artists love to leave their mark. From "scamdicappers" working online gambling rings to unscrupulous "quack" doctors, it is pretty clear. When homeowners go through foreclosure, they must be aware of the scams out there made by false business people masquerading as lenders and realtors. Their goal is to strike a deal with the homeowner to pay off a troubled mortgage. There are three popular scams currently in operation with these foreclosure predators: equity skimming, straw buying, and signing over deeds.
During the equity skimming process, a false buyer goes to the homeowner and offers his assistance in paying off the mortgage. He/she encourages the homeowner to move out fast and sign a deed to award the property to the scam artist. More... / Hide...
A second foreclosure scam is straw buying. Straw buying is when scam artists recruit a person with top credit to sign off on a document that allows the scammer to use their name and credit information in order to make a fake purchase. These innocent "straw buyers" are actually signing real mortgage applications and false documents with bad information. Here, the fake lender actually assumes the mortgage and title even though the straw buyer is still responsible for making mortgage payments. In this situation, straw buyers are committing fraud by assigning credit to someone else and would be fully responsible under law enforcement and lenders.
One last foreclosure scam is signing a deed over. This is when a troubled homeowner is approached by another lender who encourages him to deed the house over to the lender with new financing in return. In this case, the scammer may sell the property, keep all the money, and not give a shiny red cent. All in all, beware of the foreclosure scams that are lurking out there. The home you save in the future could be your own.