The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are preying on desperate homeowners is equally frightening. An increasing number of homeowners may soon be at risk to fall subject to a foreclosure fraud scheme.
Though foreclosure filings are down 80 percent from a year ago, this number may actually be quite deceiving. A foreclosure and eviction moratorium in effect since March 18, has served as a coping mechanism for those struggling with financial difficulties during the coronavirus pandemic. However, those who are still threatened with foreclosure are faced with a spike in foreclosure fraud schemes. There are a variety of mortgage relief scams to be on the lookout for.
The foreclosure moratorium, which benefits 28 million homeowners, has been extended through January 2021. In November, Los Angeles was down to 147 foreclosure starts, but this number is relatively high considering the moratorium. The moratorium is currently keeping over 5% of California’s mortgaged homeowners in their homes, despite being delinquent on their mortgages. When the foreclosure moratorium lifts, the market will likely see a wave of distressed sales. Desperate homeowners may be especially vulnerable to mortgage relief scams.
Unfortunately, there are many companies and individuals who use half-truths and even outright lies to sell their services. Some say they can get a change to your loan that will reduce your monthly mortgage payment or take other steps to save your home. Some claim that nearly all their customers get successful results and even offer a money-back guarantee. Others say they’re affiliated with the government or your lender and still others promise the help of attorneys or real estate experts. The truth is many of these companies leave their homeowner customers in worse financial shape.
One scam is the ‘rent-to-buy scheme’ in which the promise is that if you surrender the title to your house, you can stay in it as a renter and buy it back later. The claim is that by surrendering the title, a borrower with a better credit rating can get new financing and prevent the loss of the home. However, the terms of these deals usually are so expensive that buying back your home becomes impossible, you lose your home, and are usually quite quickly evicted by the new owners.
These scams are real! Just last month, nine people allegedly involved in a $6 million scheme that claimed to prevent the foreclosure of properties throughout Southern California were indicted. The defendants are accused of targeting distressed homeowners by claiming they could stop the foreclosure of homes if the defendants received monthly payments, and then delaying foreclosures and eviction actions by allegedly filing fraudulent bankruptcy documents, false court documents and false fractional interest grant deeds.
If you’re having trouble paying your mortgage or have gotten a foreclosure notice, contact the Sternberg Law Group. Our experienced, trustworthy California foreclosure attorneys are well-versed in both home retention options and strategic foreclosures. We know that the stress and anxiety that comes with losing your home to foreclosure is simply terrible. However, when it does make sense to walk away from your home, there are a few options to consider: a short sale, walking away, and ‘deed in lieu of foreclosure.’ At Sternberg Law Group, our lawyers will work with you to discuss real options and select the one that best fits your specific circumstances. The idea of foreclosure is already enough to handle, getting caught up in false advertising and mortgage relief schemes will make things much worse. If you think you’ve been the victim of foreclosure fraud, contact the Federal Trade Commission, your state Attorney General’s office, or the Better Business Bureau. If you are having trouble paying your mortgage or have received a foreclosure notice, contact us here: Sternberg Law Group. Everyone’s scenario is different; starting the process earlier helps our clients obtain the most favorable results.