When the foreclosure process is initiated and your court records indicate that, many investors will try to contact you and offer their services.
All of them want to "help" you.
Here are the most common scams you should be aware of.
First scenario: You are in a position where you cannot make your mortgage payments.
You decide to sell the house on your own.
You are approached by an investor who promises to give you the full asking price.
On top of it he will help you solve all of your financial problems.
He suggests that you move out right away and deed the house over to him.
In the meantime he offers to take over your mortgage payments.
First outcome: You move out and you are sure that you mortgage payments are taken care of.
The phantom buyer rents the house out and collects rent for many months.
He does not bother to pay your mortgage.
The lender has to foreclose on the house and you even do not know what is going on.
Why? Because you moved out.
Second scenario: Online companies with a "magic touch" promise you to communicate with your lender for a fee.
They know all of the secrets of this "special" communication and use undercover techniques.
You sign a contract with this company and enthusiastically begin to work with them.
Second outcome: The company charged you "generous" fees to prepare your paperwork.
They can even charge for the phone calls.
The paperwork could have been prepared by the most qualified person, which is you.
You end up owing this company money.
You wasted your time, which prevented you from educating yourself and taking actions on your behalf.
Third scenario: The investor tells you that you can stay in the house but you have to sign some paperwork.
This paperwork includes signing the deed over to him.
He promises that he will reinstate you mortgage.
Everything looks good and you relax.
Third outcome: In a few weeks you receive an eviction notice.
The new owner, which is the investor, has the right to evict you.
But guess what, you are still responsible for the mortgage.
Your name will be there until the mortgage is paid off in full.
How to avoid these and many more scams? 1.
Never sign any papers you do not understand.
2.
Never give the deed to anybody under any circumstances.
3.
Do not make your mortgage payments to anyone but your lender 4.
Do not pay for any services that assist in stopping foreclosure.
You can stop it yourself.
5.
There are several government assistance programs and they are free.
6.
Do not move out of your house.
There are ways to stay in your home for many months (mortgage free).