Real Estate Vultures: The Scam of Foreclosure Rescues

Foreclosure rates in Texas have reached an all-time high, thanks to the sub prime lending fiasco. A large number of people that have been affected are low-income families who didn't have enough money in the first place to buy a home. They were lured into the housing market by lowball interest rates and dodgy lending practices. These homeowners find themselves unable to make their mortgage payments now that the teaser interest rates have morphed into high monthly payments. Homeowners feeling the crunch think their hands are tied, and that there's no way out of this financial mess.

Knowing that there are a lot of people needing help, there has been a surge of businesses offering assistance to those facing foreclosure. While there are some reputable businesses out there, there are far more unethical people looking to profit off of struggling homeowners.

Facing possible foreclosure is extremely stressful and overwhelming. When the white knights of foreclosure rescue come along, homeowners feel hope again. Somebody is finally on their side! Little do they know, many foreclosure rescue companies are scam artists, and nothing more.

These scammers may be called foreclosure rescue agents, foreclosure consultants, or foreclosure services. They find their targets through a marketing campaign which can include posting fliers around neighborhoods, going door-to-door, or sending out mass mail outs. They also find victims by actively searching for people who are behind on their payments. They then contact these homeowners, and promise to save them from financial ruin.

Once they have piqued the interest of a homeowner, these con artists go after the property title. They may do this by blatant trickery, such as leaving blank spaces on a contract, only to fill it in later, or by having the homeowner sign a document that has complicated jargon that the homeowner can't understand.

These 'consultants' may even directly ask the homeowner to sign over the title. Their sales pitch is this: you sign over the title, and I will rent the property to you until get you back on your feet. Then I'll transfer the home back over to you. For a desperate homeowner, this may sound like a lifesaver, but the results of this transaction can be disastrous. Some of these con artists simply take the property, sell it, and keep the money for themselves. The homeowner not only loses the house, but they also still owe an outstanding balance on it.

The other trick these people employ is to offer to work with the lender on the home owner's behalf, to negotiate better terms. The foreclosure company has you make payments directly to them. These scammers then pocket the payments and leave town. Homeowners are then in an even worse predicament than when they started

These crimes are particularly distasteful because they tend to focus on the most vulnerable members of society, including the elderly, the mentally ill, and low-income families. These people have little resources to begin with, and now someone has the audacity to take advantage of them in their time of need. It is despicable, and states like Texas are trying to do something about it. Unfortunately, rectifying these types of situations are time consuming and costly. Often homeowners can't afford to hire a lawyer to fight for monies lost.

Education is key in preventing these types of tragedies from occurring. Homeowners need to know what their options are when they fall behind on their payments. They need to know that going to their lender is the absolute first thing they should do if they find themselves struggling. Lenders don't want to foreclose on your home because it's an expensive process. It's in their best interest to renegotiate with you. Also, be sure to read everything before signing a contract. Be careful who you trust. If you see a hand written advertisement for financial help on a telephone pole, chances are it's a fly-by-night business, one that you don't want to get involved with. And don't feel pressured into making snap decisions. A scam artist will rush you into things, whereas a legitimate business won't. Trust your gut, get some professional advice, and if it sounds too good to be true...

Free Article Source: http://www.za77.org

Eric Bramlett is an Austin TX realtor. Eric strives for excellence in all his transactions, and can assist you with finding exactly what you need in the Austin TX real estate market.

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