Foreclosure fraud is a kind of fraud that takes advantage of those in danger of undergoing foreclosure. If you have fallen behind on your loan payments, there are legitimate options for help. However, you must be wary when determining the best options for you, because a foreclosure scam can be devastating, especially when you’re already having money problems.
Kinds of Foreclosure Fraud
Foreclosure fraud can come in many different forms. Some of the most common kinds of foreclosure fraud include promises of modifying a mortgage to make it more affordable. These can occur in multiple ways.
Some scammers may offer a modification of the mortgage for an upfront fee. After receiving this fee, they will disappear. The home is often foreclosed on because the individual does not have the funds to continue mortgage payments after they’ve paid the lump sum to the scammer.
There are also “balloon payments,” where a lender offers to significantly lower the monthly mortgage payment. This works because the individual is only paying the interest on the mortgage. The lender then demands the complete amount of the loan in one balloon payment. The buyer will most likely be unable to pay this payment.
How to Protect Yourself From Foreclosure Fraud
It is important to be wary of anything concerning foreclosure. Only use reliable sources and companies for refinancing and money managing options. Make sure that you read any contracts thoroughly before you sign them. If you don’t understand something in the contract, ask about it. It may also be helpful to have a lawyer review any contracts. Keep in mind that if an option seems too good to be true, it probably is.
Foreclosure fraud can be downright devastating to your bottom line. Take necessary precautions to prevent foreclosure fraud from affecting you. To learn more about preventing foreclosure fraud, contact us at LeBaron & Jensen today!