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Foreclosure scams are on the rise. Do you know what you’re getting into?

Suppose you are in a bad situation and you fear you will lose your home to foreclosure. You are up late, sweating and fretting, when suddenly, as you try to surf your problems away, you hear an infomercial. Someone has the answer to your housing woes! Hurrah! They will share it with you, if you just call for free mortgage help. Operators are standing by…

It is too good to be true. Though all the great economic and social thinkers in the country are struggling to find a solution to the housing crisis, you have found the answer at 3 am. So you call and the company promises to solve all your foreclosure problems, a dream come true! Isn’t it?

How the Programs Work

You find they want an upfront payment, often equal to a month’s mortgage. This is a stretch for you, but may seem worth it. They claim to intercede with your lender. They may ask you to sign over a deed to the property. You think all is well until your lender contacts you and says that because they have not heard from you or received any payments, they will have to take further foreclosure action. You are confused, you are mad, you are devastated. Then you realize: YOU’VE BEEN DUPED by a foreclosure scam!

The company may not have made contact with the lender. In addition, the fee you paid probably never got to your lender, though you got a phony document that the foreclosure has been set aside. You may owe your lender more than you did before you called for “help.” You may receive a bankruptcy filing in the mail, filed on your behalf, even without your knowledge. You may end up with more legal bills, a poor long-term credit picture that will make it harder fot you to buy or rent for the next 10 years, and perhaps, have no home if he has signed over the deed.

Types of Scams

There are many variations on these scams, but in any case, you usually end up in a bad place. Foreclosure scams fall into three main categories:

Phantom Help: The company promises to contact your lender, which they may or may not do, regardless of what they tell you. They may fill out some basic paperwork you could have completed yourself.

The Bailout: The company offers to buy the home and rent it back to you until you can buy it back. Many times, they pocket what you pay while never dealing with your lender, so you end up with no property and no place to live.

The Bait and Switch: The company may have you sign documents to make the mortgage current, but actually you are signing over your home.

Free Help Available

Not all companies who charge a fee for mortgage help are scammers, but if you’re at risk of foreclosure, legitimate free help is available from several sources:

Look for help by the Federal Government through Making Home Affordable. Even if you do not ultimately qualify for this program, there is plenty of free or very low cost help available from HUD-approved housing counselors and non-profit groups that will either help you stay in your home or move on to a new stage in your life. Ironically, since the government started its program, foreclosure scams have actually been on the rise.

If you want to sell your home quickly and move on with your life, Express Realty Services can help with that. As the #1 Keller Williams team in the country, we can buy your home outright or list it for sale.
 Just call us at 888-306-9450 or visit our website to chat with a representative about how to get started.

Selling a home at short sale is a viable way to avoid foreclosure.  For a prospective home owner, buying a home sold at short sale can be a great way to find a place where the price is right and the home is in reasonably good shape.  With a short sale, the seller, with bank approval, offers the home at a competitive fair market rate that is less than the mortgage balance.  Because the seller still lives there and regards it as home, the home is more likely to be in livable condition as compared to bank owned homes that may be gutted and trashed by angry owners on the way out.  If the seller is having financial problems culminating in a short sale to avoid foreclosure, the home may need some work and lack the last-minute fix up efforts sellers usually perform before listing their homes.

Why Short Sales Are a Long Story

To date, the biggest problem with trying to buy a short sale home is the long wait to close; not the quickest way to sell your house fast.  The seller and his agent must get bank approval of the specific terms of the sale, a very lengthy process.  Sometimes after months, the lender nixes the transaction which leaves the weary buyer without the home he wants and the seller frustrated and deeper in debt!

Short sales are seen by many real estate experts as the best way to alleviate the current housing crisis.  Lenders have been reluctant to embrace the concept, although it can save thousands of dollars ($50-60,000 by some estimates) as compared to foreclosure.  In any case, they are often understaffed to handle the current and anticipated demand for short sales.  When the large pile of documentation required for a short sale is put in their hands, the real estate agent or the seller embark on weeks or months of persistent calling to help move the paperwork through the process.

New Hope for Short Sales

There is some hope these days that the process will be shortened.  As part of Obama’s Making Home Affordable program, the Treasury Department is on the verge of issuing new directives to promote short sales.  Mortgage servicers will be eligible for $1,000 to compensate for the extra work, while sellers will receive a $1,500 incentive to pursue a short sale, leave the home quickly, and leave it in good condition.  The incentives will not reach the lenders or mortgage investors who are holding up the deals, so skillful negotiation will remain the key to success.  Ideally though, the incentives are intended to encourage cooperation between real estate agents and lenders to move housing inventory more quickly.  The new Treasury rules will also cover deed-in-lieu transactions where the homeowner turns the home over to the bank before foreclosure.

The Short Sale Alternative

As is it is now, short sales work best for potential buyers with time on their hands.  If you are a seller and contemplating a short sale, contact Express Realty Services. We have a fully staffed, professional short-sale department with tons of experience negotiating successfully with banks and lending institutions.

Options, Alternatives and Great Ideas

Thinking of buying a short sale? Check out Express Realty Services. Not only do we have short sale properties to show you, but we also specialize in selling homes quickly. We offer short-sales, bank-owned and many newly renovated homes in move-in condition.  In fact, over the past year, we have sold more than 100 homes in fewer than 40 days, beating the DC Metro market by almost 300%.

Wondering if this is good time to buy a house? Our Monthly Market Update pulls together all the current statistics to encourage you to take advantage of the $8,000 Home Buyers Credit if you are a first-time buyer and act quickly before this credit expires.