Predatory Lending and Scams
Unfortunately, there are always unscrupulous people out there who are looking to take advantage of someone else’s financial desperation. Such people are called predatory lenders. These lenders target consumers who have few other financial resources and con them into loans or other agreements that usually are grossly one-sided in favor of the lender and end up with the consumer in worse financial condition than when he or she started.
If you are in a foreclosure, consult an attorney. Bankruptcy, loan modifications and refinancing are some of the ways to avoid losing your home. You need legal counsel experienced in these areas to review your situation with you. Also, avoid making your situation worse by following these precautions:
Avoid lenders who seek you out and make promises that sound too good to be true. Often the loans made by these lenders will contain harsh provisions that no borrower would ever sign if they were thinking clearly. Ridiculously high interest rates and stiff pre-payment penalties may be buried in the fine print. Also, the interest rates for such loans may not be “fixed” which means that the borrower’s monthly payments may soon sky-rocket and the consumer may find themselves back in foreclosure.
Do not deed your property over to someone who proposes to then “rent” the property back to you after they “catch up” the original mortgage loan. Once the property is deeded out of your name, the lender has the legal right to do with the property as it pleases. This may include selling or mortgaging the property. Since you are now merely a tenant of the property, your rights will be severely reduced and any of the profit made from the property’s sale will end up in someone else’s pocket.
Do not pay someone to work out a mortgage resolution for you. If you are eligible for a loan modification, you can apply for a refinance or modification program for free by contacting your lender. If you believe that you need help with this process, many non-profit reputable agencies exist who will assist you without you having to pay a large fee for their services. Most of my clients who have hired a for-profit “mortgage resolution” firm have told me that after receiving their large initial payment that the company never did anything to assist in the loan modification process.
Never make your mortgage loan payments to any party other than your mortgage company. Prior clients have advised that they were contacted by companies promising lower interest rates and much smaller monthly payments. The scammer insisted that the clients make payments only to the mortgage resolution company rather than to their lender. Ultimately it was discovered that the new company had never turned the payments over to the mortgage company but had instead kept them to apply against phony “fees” that they were charging the client. The result…foreclosure actions filed by the mortgage companies.
If you are facing foreclosure, consult an experienced bankruptcy attorney for legitimate advice.
