New Scam Targets Homes Nearing Foreclosure
A new type of scam that targets properties in distress has been identified in several states where pricing "bubbles" mean house prices have surpassed many people's ability to keep up with house payments.
The scams work in a number of ways to trick people into giving up their houses, a profitable venture in areas where homes are at a premium. Three such scams include:
Homeowners are asked to sign what they think are refinancing papers - but somewhere in the stack of papers is a quitclaim deed that transfers title to the scammers. In some cases the signature page of what supposedly is a previous document page is on its own page, which is later transferred to the quitclaim deed.
Homeowners pay outrageous fees to supposedly get help negotiating a new loan with a lender, but discover the fees walk out the door with the criminals.
Houses are sold to a third party with leaseback options for the homeowners, but the repurchase provisions of the lease are so onerous they cannot be met.
The scams are often publicized with posters attached to trees and bus stops in working class neighborhoods.
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 8, 8/05
First published on 08/01/2005