Foreclosure Scams What You Need to Know

Home foreclosure is a VERY common problem that people face today. More often than not it starts from one missed payment which then spirals out of control. Before you know it you have missed three or four payments and the lender/ bank wants you to pay everything you owe all at once. Now the home owner panics and is looking for some type of “help”. This is the mindset that sets someone up to become a statistic to a scam artist.

This is when the swindlers and crooks find their way into your mailbox or give you a call. Foreclosure scams are as common as the problem itself. Since homeowners believe that they have no choice they fall for these traps and make their situation much worse than it was before. It is not uncommon for these scams to lead to even greater financial problems then the homeowner faced in the first place. In some cases the homeowner ends up becoming a identity theft case as well.

Scam operators also distribute flyers, advertise online, publish advertisements in the local newspaper, and call homes which are included on the foreclosure list. They call themselves mortgage consultants who offer foreclosure services or advertise with “We buy houses” slogans and signs.

Common scams:

Bankruptcy Foreclosure Scam

This scam operates by promising the homeowner that their house will be saved. In return they will either ask for the homeowner to pay their mortgage directly to them, hand over their deed and pay rent, or obtain refinancing. Of course these crooks never do anything for you…they contact NO ONE on your behalf. They keep all the money and file bankruptcy without your knowledge. Eventually they just skip out on you.

Since the homeowner is not aware that bankruptcy has been filed, they fail to participate in the case. The case is dismissed and the house continues onto foreclosure. Apart from loosing money and your home, you will also have a bankruptcy on your record.

Equity skimming

The scam artist poses as a buyer. They then promise the homeowner to pay the mortgage or given them a sum of money once the property has been sold. The operator then convinces the homeowner to sign over the deed and move out. The homeowner can stay but they have to pay rent. If they opt to move out the operator lets a third party rent the property. The operator does not pay the mortgage and lets the mortgage lender foreclose. and of course they skip town and are never seen/heard from again.

If the house has equity, the operator sells the property and pays off the debt. Then the operator keeps the equity that the homeowner could have had if they sold it. In few cases, the scam operator actually finds a buyer or sells the house. Normally they just set up a p.o.box with a forwarding address for the “rent check”.

Doc Schmyz has done real estate deals all over the US. He built a free website that shares Real estate investing information all over the US. Find real estate information by state

Five Things You Need to Know About Debt Collectors Rights

If you owe money to creditors, you may already be aware of your rights under the Fair Debt Collection Practices Act. Under the Fair Debt Collection Practices Act, also known as the FDCPA, you have the right to demand certain ethical debt collection practices from debt collectors.

The FDCPA specifies exactly when debt collectors can contact you, how they can do it, and what they can tell you in order to collect on a debt. One example is that a bill collector can’t tell you a lie or misrepresent the truth about your debt. The FDCPA was created after a long string of debt collectors abusing people to collect on debt. What you probably don’t know about the FDCPA, however, is that even bill collectors have rights.

The first is that they have the right to communicate with you to let you know that you owe a debt. They can communicate with you via telephone or by letter. In this phone call or letter, they can tell you exactly how much you owe, including any fees or penalties.

Next, they have the right to keep contacting you unless you tell them in writing that you don’t owe the money that they claim you do, that you don’t owe them as much as they say you do, or that you’re demanding that they give you proof that you owe the debt. They are, however, limited by the FDCPA in how and when they can communicate with you, but as long as they stay with the rules under the FDCPA, they’re allowed to continue to contact you unless you tell them to stop.

Thirdly, if the original creditor and the debt collector are one and the same, or the debt collector is an in-house agency affiliated with the original creditor, they’re allowed to keep contacting you even if you ask them to stop. The reason for this is that the FDCPA doesn’t see creditors as being the same as debt collectors, so they don’t have to operate under the same rules as debt collectors do. Of course, they still have to obey the guidelines of decent behavior as outlined by the FDCPA, including not annoying people that you know, or calling you during all hours of the night.

Fourth, a debt collector has the right to contact others about your debt. They can only do this once, though, and they can only do it to find out your address, your telephone number, or the place where you work. They are, however, prohibited from contacting any third party multiple times, because that would be harassment.

Lastly, a debt collector can sue you in court in order to collect on a debt that you owe them. Of course, you still have the right to defend yourself in any legal proceedings, but if the judgment goes against you, the judge may garnish your wages.

When dealing with debt collectors, make sure that you know your rights under the law. But also make sure that you know the rights that the law gives to debt collectors. This knowledge can help you to better deal with them when and if they become a problem.

Sean Payne is crazy about personal finance and getting out of debt. After paying off his own debt, he devoted years to finding the quickest way to get out of debt, and keeping your cool while dealing with debt collectors. To learn more about debt collectors’ rights, and what you can do to preserve your peace and quiet, check out his excellent debt reduction course.