Don’t Get Scammed with an Advance Fee when trying to save your home from foreclosure!

By
Real Estate Agent with Century 21 Award

 

There is no such thing as a legitimate advanced (miracle) fee to save you from foreclosure!  There have been multiple thousands of foreclosures in California since from 2007 and 2008.  Unfortunately some unscrupulous scam artists have taken advantage of vulnerable homeowners facing foreclosure.  At risk are homeowners who either want to stay in their home, or are desperate for an exit strategy that may save their credit and get them out of the bind of a choking home loan.  Foreclosure rescue scams are on the rise and one of the schemes being practiced is the illegal and/or improper collection of advance fees.

 

Operator of the schemes comb through the public records to obtain information on the properties against which a notice of default has been filed.  These operators then contact the borrower with promises of rescue, but require payment of an advance fee.

Most often, the advance fee is collected by credit card and can range in cost from hundreds to several thousands of dollars.  To induce the borrower to pay the fee, scammers tell the borrower they have the expertise and contacts to make sure that the loan can be modified and that they can negotiate with lender to permanently reduce payments to sustainable levels.   

 

In addition, the borrower may be told that if they deed the property over (typically to an associate of the scammer) they  no longer are responsible for making payments and their credit will not be affected.  The next step is that the scammer rents the property back to the borrower and collects rent on top of the advance fee.  

 

The kicker here is that once the above mentioned money is collected, no work is performed to save the loan or credit and the scammer allows the home to foreclose.

 

Keep in mind that many legitimate businesses engage in foreclosure consulting do collect legal advance fees and the service may consist of assisting a borrower with loan modification.   Real estate law requires that ALL advance fee contracts used by a broker must first be approved by the Department of Real Estate prior to use.  The broker must hold the money in a trust account until services are rendered, according to law.

 

In cases when notice of default has been filed, the collection of an advance fee is generally precluded by the Foreclosure Consultant Law.

 

Bottom line, advance fees are not necessarily indicative of a scam it could be an indicator of trouble.

 

Until next time my friends.

TCB,

John McGoldrick

 www.SirRealEstate.us

 email:  SirRealEstate@aol.com

 

 

Comments (1)

Rick Sergison
EXP Realty of Canada Inc., Brokerage - Pickering, ON
Durham Region Real Estate Blog

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My main blog on Active Rain is here: Charlottesville Real Estate Blog, not the link at the bottom of this post. 

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Aug 11, 2008 04:37 AM