Sunday, March 15, 2009

Foreclosure Rescue Scams

As soon as a lender raises the red flag, scammers descend.

While the schemes vary in their mechanics, all follow a similar pattern. An individual or group, in the guise of helping a homeowner avoid losing his or her house, persuades the owner to transfer the title to the rescuer or another designated buyer.

The unscrupulous individuals or groups approach homeowners facing foreclosure and promise to help them save their homes. In many instances, they convince the troubled homeowner (who is desperate to save their homes) to transfer the deed over to them with the promise that the investor will make the mortgage payments going forward, and the previous owner can rent while they try to rebuild their savings and repair their credit.

Once the supposed “angel investor” gets the deed to the house, they boot the former owner out—and sell the property for what’s often a hefty profit.

Source: Businessweek

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