Be Cautious Of Those Offering Foreclosure Help
If you are facing a potential foreclosure, you are in a tough situation. But you aren’t alone. With interest rates on the rise and home appreciation on the slow down, many homeowners are having trouble hanging on to their homes.
And there are plenty of people banking on the desperation that this causes. You may have noticed advertisements popping up for help avoiding foreclosure. Are they legit?
First of all, no matter what your situation, you should always treat any offer of assistance with caution. Many cons use “helping” as a way to cheat struggling homeowners out of their equity. You could lose the money you have in your home and your home too.
Mortgage foreclosure rescues come in several forms. You may be loaned money by the rescuer in order to pay off the mortgage that is facing foreclosure. You will be asked to sign a loan agreement, but it isn’t what it seems. You are actually transferring all of your interest in the property to the rescuer. You are then evicted from the home.
Sometimes, the homeowner knows that he is signing over the title to the property. The rescuer pays off the property and the homeowner agrees to lease the home and continue to live there until he is back on his feet financially. But the lease payments will become larger than the mortgage payments. The victim falls behind and is evicted. If the victim doesn’t fall behind, the rescuer will set the price of the home so high that it cannot be repurchased.
Many homeowners believe that if they are foreclosed on, they loose everything. Even if you lose your home to the lender, you may still receive money for it. The lender will only take any unpaid mortgage and associated fees out of the sale price of the property. The rest is your equity and will be paid to you. If you sign over your property to someone else, they will receive the proceeds from the sale.
How do you recognize and avoid scams?
1. Ignore any signs or bulletin board notes that offer foreclosure help. If they are advertising on the windshield of your car, they probably aren’t legit.
2. Don’t give out any information to anyone who contacts you wanting to help. Cons frequently check the public foreclosure notices for potential targets. They are betting that you are desperate to find a way out of your situation.
3. Read every single document, front and back. If an offer is too good to be true, it probably is. If someone says that you won’t get a dime after your home is sold, don’t put your trust in them. There is often a good chance that you will. For a few hundred dollars, you should have an attorney accompany you to read through every document that you are expected to sign. Also, watch out for documents with blanks and empty spaces.
4. Check out any company you are considering turning to with the Better Business Bureau and the state Real Estate Commission. You might even want to contact the state attorney general’s office to see if there are any open investigations of the company or its owners.
Easy Ways To Handle Bank Foreclosure
Recently, my significant other and I found ourselves facing bank foreclosure on our home. We knew it was coming. We had missed several mortgage payments while we were laid off from our jobs at the mine. Stupidly, we decided not to communicate our problems to the bank. We tried to make do with part time jobs at fast food restaurants, but trying to make all of our payments on time and still have money to buy diapers and food for the kids was very difficult. It was a scary situation to be in.
The first step in bank foreclosure is missing a payment. It does not matter why you miss that first payment, but the foreclosure ball starts rolling at that point. Once fifteen days have passed from your missed payment, the bank usually tries to contact you. If you do not talk to the bank, more problems are in store. Forty-five days later, the next step is taken. At this point, you are usually warned, in writing, that you are facing foreclosure if you do not take action immediately. If you allow another thirty days to pass with nothing, the formal paperwork will begin.
There are several steps you can take before the formal foreclosure process begins. All of these, though vary from state to state. In some states, you can file for bankruptcy. Most will allow you to keep your home as a protected asset. There are two types of bankruptcy you can file for. You can have your debts wiped out, or you can have your debts reorganized so you can continue to pay lenders as much as you can while still having money to survive on. Either way, the ability to file for bankruptcy and keep your home will depend entirely upon the laws in your state. Another thing you can do before the formal bank foreclosure process starts is talk to your lender.
Most lenders are willing to work with customers to lower payments temporarily, suspend payments for a few months until you get back on your feet, or make some other arrangements. Banks do not want to foreclose on people. There isn’t some guy sitting in an office giggling manically thinking, “Hmm, whose house can I take today?” Foreclosures are just as much hassle for the bank as they are heartache for you. The final thing you can do before the formal bank foreclosure process begins is look for resources to help you within your state. Many states have foreclosure prevention associations that will provide you with the resources you need in this difficult time.
Even with the best resources in the world, you may still be unable to prevent the sheriff from showing up on your doorstep with a foreclosure notice and giving you a few minutes to get any belongings you can grab and head for the streets where you may be spending a very long time. The important thing to remember is to try to prevent this nasty process before it starts.
