Tuesday, May 22, 2007

Mortgage Foreclosure Scams Part 7 of 7

Here are some tips, from the National Conusmer Law Center's Foreclosure Report, warning what should NEVER be done as a consumer:

  • Don't panic. Get all of the information on the foreclosure process in your state, and how much time you have to resolve your problems before losing your home. Paying special attention to the date that you can lose your legal right to your property is extremely important.

  • Never sign a contract under pressure. Take your time to review the paperwork thoroughly, preferably with a lawyer representing your interests only.

  • Don't sign away ownership of your property (often referred to as a "quit claim deed") to anyone without advice from your lawyer. Be especially suspicious of offers to take over ownership of your home as part of a deal that will allow you lease or rent the home until you buy it back in a few years. Most buybacks are extremely expensive or nearly impossibly to pay, and most people never get their homes back. (As I think about this form of property theft I'm reminded of the pawn shop concept of jewelry robbery!)

  • Beware of any home sale contract where you aren't formally released from liability for your mortgage. Also, make sure you know what rights you're giving up and that you are actually agreeing to give them up.

  • Never make a verbal agreement. Get all promises in writing and get full copies.

  • Don't sign anything that has blank lines or spaces. Information could later be added that you don't agree to - after you've signed.

  • Don't give in to promises such as the following, often used as ploys to entice consumers into deals which could cost far more than the promised savings:

- "We'll pay for your closing costs" or "We'll save your credit"

- "We'll pay your first two months rent or payments in your new home"

- "You'll get several thousand dollars cash back to use any way you'd like."

- If you sign the title over to us the foreclosure will be recorded against us, not you."

- "We'll buy your house 'as is'."

- "We guarantee we'll find you a buyer in seven to 14 days." (But at what price?)

- "We'll get you a new mortgage with low monthly payments." (But they don't tell you how much is borrowed or for how many years worth of payments.)

- "We'll help you file bankruptcy to stop this foreclosure." However, bankruptcy only buys you time to fix the finances, it doesn't stop a foreclosure. If you do this, make sure the person offering to help is a reputable bankruptcy attorney, who really knows what they are doing.)

- "It may cost you thousands more if your property is sold at a public auction."

- "We'll give you $40.00 in Free Gas."- "We have an interpreter for you." If you do not speak the same language as the "rescuer", bring your own translator, do not depend on the accuracy of the translation of a referred translator. Trust your own.

Saturday, May 5, 2007

Mortgage Foreclosure Scams Part 6 of 7

Here are some signs that one should proceed with caution, or even question the transaction. These can help protect consumers from fraudulent transactions, and help loan officers and mortgage professionals learn to recognize fraud, and even help to educate customers in the event that they need help in the future. Use extreme caution if you are asked by an individual or a company to do any of the following: (This advice comes from the U.S. Trustee Program of the Federal Department of Justice for homeowners facing foreclosure or having trouble paying their mortgage.)

  • Calls itself a "mortgage consultant," a "foreclosure service," or anything similar.

  • Contacts or advertises to people whose homes are listed for foreclosure, including anyone who sends flyers or solicits door-to-door.

  • Collects a fee before providing services to you.

  • Tells you to make your home mortgage payments directly to them instead of to your mortgage lender.

  • Tells you to transfer your property deed or title to them.

You should always stay in touch with your mortgage company, and if necessary, contact an attorney WHEN YOU FIRST REALIZE YOU ARE IN TROUBLE. My father, who was an attorney in Los Angeles for very many years would give the same advice. (In fact, he has given me similar advice - contacting someone the moment you realize that you could POTENTIALLY be in trouble, and each time I did not follow that advice, I was in deeper trouble at the last moment than I would have been if I had just communicated any information I had known AT THE TIME I FOUND OUT. The aftermath is generally worse, too.)

So far there have proven to be two key tactics to avoiding not only foreclosure in some cases, but fraudulent transactions robbing you of your equity or your home, or both: communication and education. Sound too hard? The alternative is lose everything you have worked hard to obtain and gain over the past years.