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Foreclosure Scams Rising - Not an April Fool's Joke

By Catherine Myers

Real Estate Agent with Windermere Bay Area Properties

April 01, 2008 12:37 PM

Here are some general tips that I wrote about on my blog specific to short sales . I attended an event at our local Law School (JFK in Pleasant Hill) about the sub-prime bust. Very interesting speakers and I'll probably devote a couple of other blogs about the various subjects in the near future. The one speaker though I thought was very important and very timely. He was Ken McCormick of the Contra Costa County District Attorney's office. He's the lead attorney prosecuting real estate fraud in our county. Here are some things he mentioned. And my reminder to all those in distress and facing the possiblity of foreclosure. If something sounds too good to be true, it probably is. Here you go:

DO NOT fall prey to "foreclosure consultants." NEVER pay upfront fees, or any fees, for someone else to do something you can do yourself, i.e. contacting your lender to negotiate a resolution, a delay or a short sale. You can seek the counsel of a FREE HUD/housing counselor. An EXPERIENCED real estate agent can do this for you for FREE. You can do this yourself. Do not pay anything out of pocket.
Beware of anyone offering to delay the foreclosure of your home for transferring a portion of your house to their company. Do not transfer ANY part of your property to anyone. Transferring your title does not relieve you of the responsibility of the mortgage.
You can not eliminate your mortgage, so run away from anyone who tells you that they can "eliminate your mortgage." These schemes are complex and not only can you lose your home and all rights to other remediation, but you may be a party to criminal acts. Don't do it.
Hang up or shut the door if anyone approaches you with an idea that all you do is transfer the property to them for a set period of time (i.e. 1 year) and you can stay in your home as a tenant - often for FREE. Then, they promise, you fix your credit, bolster your financials, then you get your property back and all's well. Did that sound too good to be true? IT IS. Don't do it, and report these types of people.
Warning bells should go off if anyone approaches you to either buy your equity or to pay your past due amount and save the house from foreclosure. They say, sell it to me and you're off the hook. Don't do it. Many homes now do not have any equity in them, but regardless, there are those offering to just pay your past due balances in exchange for the title of your house. Beware of anyone offering to "buy you out" of foreclosure.

Hope these help. Check out my Short Sale blog for specific agencies who can help if you are facing foreclosure.

Catherine Myers, REALTOR
Alain Pinel Realtors
Walnut Creek, CA
925-683-2125
www.DiabloValley.net
www.ContraCostaShortSales.wordpress.com

Contra Costa County
(serving Concord, Pleasant Hill, Walnut Creek, Lafayette, Danville, San Ramon, Alamo, Antioch, Brentwood, Oakley, Pittsburg, Martinez and surrounding areas)

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Judi Glamb

Coldwell Banker Hearthside - Hellertown, PA

Associate Broker, ABR

Interesting and good info. The first 3 seem obvious (at least to me). I found 4 & 5 interesting. I was working with a client last year who made some sort of arrangement - I don't know the details other then that they are able to stay in the house (it's been almost a year). I heard of another who has a friend thinking of buying the house and renting it back. I do hope that both of these are legit and not a scam (I don't know the details of either other than I think both involved personal friends).

Apr 01, 2008 12:53 PM

Lisa Lambert

The Law Offices of Elisabeth A. Lambert - Fresno, CA

Esq. 1031 Exchange Expert

Catherine:

You were very fortunate to hear Ken speak. He is the GURU on real estate fraud in Northern California. To all: please heed Catherine's post. This is extremely important information. Many people have already been hurt by these frauds and scams.

Lisa

Apr 01, 2008 12:59 PM

Catherine Myers

Windermere Bay Area Properties - Walnut Creek, CA

Walnut Creek, CA Real Estate

Judi, well hopefully the people are good friends. And in the first case you mention I wonder if they are expecting to get it back? There probably are legit investors who would love a built in tenant. Its when they promise they'll give it back that alarm bells should go off. Plus I'd say be careful because as the homeowner, did they exhaust all efforts to keep the house?

Lisa, I love knowing I heard a guru :) Truly though , he was full of great information and I hope that I can get him or someone from his office talk for a group I'm pulling together.

Apr 01, 2008 01:06 PM

Don Fabrizio-Garcia

Fab Real Estate - Danbury, CT

Owner/Broker/Trainer - Fab Real Estate

Hi Catherine - the scammers are out there, and unfortunately, they're preying on those in desperate situations.

Apr 01, 2008 01:14 PM

Don, yes, this market is ripe for those who are ethically challenged. "When there's blood in the water, the sharks come out" is a saying I heard.. and they certainly do.

Apr 02, 2008 03:01 AM

Pam Winterbauer

Pam Winterbauer Real Estate - San Ramon, CA

"Providing Blue Ribbon Service"

Catherine.....thank you for sharing this information. It is sad how many consumers can fall prey to these kind of scams, especialy the elderly. the bottom feeders are always out there to take advantage.

Apr 02, 2008 05:23 PM

Karen Luke

South Metro Property Management, LLC - McDonough, GA

Henry County Real Estate

You can't help but wonder, if these folks had the money to pay the scammers, then why wouldn't they just pay the mortgage instead. It is so sad.

Apr 03, 2008 09:42 AM

Scott Case

RE/MAX Elite - Satellite Beach, FL

CDPE IRES

We are seeing similar hucksters in Florida as well.

Apr 09, 2008 07:53 AM

Cheryl James

Weichert Realtors - Easton, PA

5. Warning bells should go off if anyone approaches you to either buy your equity or to pay your past due amount and save the house from foreclosure. They say, sell it to me and you're off the hook. Don't do it. Many homes now do not have any equity in them, but regardless, there are those offering to just pay your past due balances in exchange for the title of your house. Beware of anyone offering to "buy you out" of foreclosure.

I guess its better to just accept foreclosure and Destroy your credit? Believe it or not, their are reputable people doing these transactions everyday!

A foreclosure is going to prevent the possibility of getting any new credit for years to come. What do you think would happen to someone's credit if their mortgage was being paid on time every month? If it is done right, this can be an awesome solution!

Jul 23, 2008 07:19 AM

Cheryl, so what are you saying? That someone should sign their title away to someone else but still be stuck with the loan? I don't understand what you're trying to say?

Jul 24, 2008 12:16 PM

Foreclosure Scams Rising - Not an April Fool's Joke

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