Home equity loan scam masquerades as “foreclosure help”

Home and equity is at risk when you accept a foreclosure help loan

Home equity values are up, as the value of the average home in the United States now exceeds two hundred thousand dollars, the highest figure ever. Despite the high prices, real estate sales have been brisk during the last five years, as other types of investments, such as tech stocks, have been flat. Homeowners have seen their property values and equity skyrocket, and some homeowners have seen the value of their homes triple since 2000. The prices have increased so quickly that many longtime homeowners don’t even realize that their homes may be worth several hundred thousand dollars more than they thought. Unknown to them, however, is that there is a new breed of home equity

thieves that are preying on such homeowners, and these thieves know exactly how much those homes are worth. With the help of a relatively recent scam known as “deed theft”, these thieves have been relieving thousands of people of both their homes and their equity.

The concept of deed theft is a simple one. The thieves pass themselves off as being helpful, and post flyers around town or run ads in the local newspapers offering to “help” those with debt problems. Their targets are homeowners who may be in some financial trouble or have some temporary setback, such as a job loss, that makes it difficult for them to make their home payments. The economic downturn of the last few years has left quite a few people out of work, however temporarily, and these people may have trouble paying their bills and may be worried about foreclosure. The thieves, through their advertising, offer to “help” those with such problems. They will meet with the owners, explain that they can temporarily make the house payments or pay whatever amount that the homeowner may be behind in the house payments. In exchange, the thief asks the homeowner to sign the deed to the house over to them. They explain that the owner can rent the home while getting his or her financial affairs in order and then purchase the home back from the “rescuer” in a year.

On the surface, this would seem to be a friendly gesture. The “rescuer” offers to help the owner make their payments, offers to rent the home to them, and offers to sell the home back after the owner is back on his or her feet. There’s only one problem - the “rescuer” has no intention of selling the home back to the homeowner. In fact, as soon as the title is signed over, the “rescuer” will probably evict the former owner from the home. After that, as the legal owner of the property the “rescuer” or thief can sell the home or take out a home equity loan, and simply pocket the cash. The original owner of the home has no recourse, and will lose both their home and their equity.

This real estate scam is quite popular in Florida and elsewhere but can easily be avoided. Homeowners with money problems should simply contact their mortgage company and explain their situation. Your mortgage company would probably rather work out a solution than foreclose, especially if the setback is a temporary one. Homeowners should first ask the help of those with whom they are already doing business before accepting “help” from strangers who post signs on telephone poles.