Beware of Offers to Stop Foreclosure That Seem Too Easy - They Are!

If you are expecting to be foreclosed upon any offer to end this financial stress and stop foreclosure may seem like the answer you've been hoping for. Unfortunately there are people out there who prey on the vulnerability of people who are in this situation.

Once you have become delinquent on your mortgage your property will be listed as becoming available to buyers. Some scammers will have access to this list and use it to contact you with a potential scam.

A foreclosure attorney in Schaumburg will tell you that these scams can offer a quick fix but still result in you losing your home.

An article in the Chicago Tribune recently outlined the scams that may be offered to you when you are trying to stop foreclosure.

1. Leaseback -
When someone offers you a leaseback it means that they buy your house and relieve you of your debt. Then you can continue to live in the house and lease it (pay rent) for a set period of time, typically a few years. After this time you have the opportunity to buy your home back. 

Leaseback scams happen in different ways. The new owner may cancel the agreement if you are even a day late on your payment or a dollar short, the scammer may cancel the deal and keep your home leaving you with nothing. 

Additionally the scammer may take all the cash equity they can out of the home so that when you go to buy it back the cost is significantly higher than what you sold it for. 

2. Dishonest Loan Mitigation Companies -
Loan mitigation is a form of negotiation with your lender to come to an agreement that will solve foreclosure problems. There are companies that offer to do this for you for a fee. Many loan mitigation companies are honest and very helpful. Unfortunately there are some companies that will take the few hundred dollars you pay upfront for their services and then never call your lender and you'll never hear from them again.

3. Straw Buyers -
A straw buyer follows many of the same principals as a leaseback however the straw buyer uses their good credit to co-sign a loan that helps you refinance your home. The straw buyer is compensated by a fee that is taken out of your home equity. You live rent free and then in a few years when you are back on your feet you can get the house back in only your name. The scam comes when the straw buyer strips the home of all it's equity (which they can do because their name is on the deed) which makes it unaffordable when it is time for you to buy the house back.

All of these could be good solutions to help you stop foreclosure if they are done honestly but the risk of a scam is high so beware of agreeing to anything too quickly.

Chang and Carlin
The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 866-790-8601 a Free Legal Evaluation. Chang and Carlin serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.