Common Fraud In Foreclosures And What To Watch Out For

With the end of the CARES Act and the inflow of foreclosures estimated to happen throughout the end of this year and next, more and more homeowners will be searching for a solution to avoid foreclosure. Unfortunately, this crisis gives rise to schemes and scammers that try to take advantage of homeowners going through foreclosure. 

Every year, unsuspecting homeowners fall for foreclosure frauds and foreclosure rescue scams. These frauds make promises that seem almost too good to be true. Most of the time, they are. 

Don’t lose your home or the chance of saving your home to foreclosure fraud. With the right knowledge and help from a foreclosure defense attorney, you can avoid these scams and take the right steps towards saving your home from foreclosure.

The attorneys at Denbeaux & Denbeaux Law have experience identifying and saving homeowners from potential foreclosure scams that pose a threat. Keep reading to learn more about common frauds in foreclosure and how our foreclosure defense attorney Joshua Denbeaux may be able to help you.

Common Frauds In Foreclosure

Foreclosure scammers are well known for preying on innocent homeowners going through foreclosure by appealing to their emotions and offering phony solutions to their problems that may actually harm chances of saving their homes. In order to avoid mortgage foreclosure fraud, you need to know what scams to look out for. Some common types of fraud in foreclosure include:

Equity stripping

Equity stripping is a type of foreclosure rescue scheme that takes advantage of homeowners who have little financial resources or information. An investor will purchase the home from a homeowner going through foreclosure and then lease or rent the home back to the owner. What the investor doesn’t tell the homeowner is that this scheme is actually stripping the equity from their home. Often the company who is “saving” your home may even end up selling your home to someone else, leaving you without a home or homeowners rights in your property. 

Fake counseling agencies

This is a type of mortgage fraud where scam artists claim that they can negotiate your loan with your mortgage lender and require either an upfront fee or monthly payments. However, the fake counseling agency will then run off once they receive the money, leaving the homeowner further behind on their mortgage loan payments and with less money to fix the situation.

Debt-elimination

Try to avoid scammers that claim they can eliminate your mortgage loan debt. These illegal schemes trick homeowners into thinking they can get rid of debt by creating fake documents and procedures that seem authentic while charging an upfront fee.

Loan flipping

Loan flipping is a very common form of predatory practices often performed by lenders. This happens when a lender convinces a homeowner to get a new loan with them. While the homeowner may initially receive some extra money from this new loan, over time the loan becomes bogged down with a higher interest rate, excessive fees, and late penalties. Eventually, homeowners could end up in the same situation they were in before, if not worse.

Phony government programs

This scam is aimed to make homeowners think they are being contacted and approved by the federal government for a loan modification program. Scam artists will either make fake websites or contact homeowners posing as the federal government. These scams are easy to fall for because the scam artist will use names that are associated with official government programs.

What To Do About Foreclosure Fraud

When faced with foreclosure fraud, you have a few options available to you. You can report the fraud to law enforcement and the Federal Trade Commission. Doing so will help authorities identify foreclosure fraud and hopefully put a stop to it so that it doesn’t happen to other homeowners going through foreclosure.

Know your rights. Homeowners have certain rights in foreclosure, granted by federal law and state law, in some cases. Knowing your rights can help you protect you and your family from potential fraud.

If you have faced a foreclosure scam or want to know more about your rights as a homeowner going through foreclosure, you should contact a foreclosure defense attorney. Not only are attorneys liable for the advice they give, they must also meet ethics requirements to maintain their license, overseen by a Bar Association. You can have peace of mind knowing you’re getting advice from an experienced foreclosure attorney and avoid being taken advantage of by scammers.

Don’t wait until it’s too late. Speak with an experienced attorney to see what you can do to avoid or stop foreclosure fraud.

Contact A Foreclosure Attorney Today

It’s easy to fall for foreclosure schemes and scammers when you don’t know who’s trying to help and who’s just trying to take your money. With Denbeaux & Denbeaux Law, you can rest assured that we have your best interest in mind.

We know that the foreclosure process can be hard to navigate, especially when trying to avoid scams that could be harmful to you and your family. Our New Jersey law firm helps homeowners going through foreclosure, so you don’t have to do it alone.

Contact us today for a free phone consultation and learn more about how a foreclosure defense attorney like Joshua Denbeaux may be able to save you from predatory foreclosure fraud.

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