January 21st 2008
Foreclosure Rescue Scams
Foreclosures are becoming more common in the current mortgage crisis. Some professionals are approaching homeowners who are in over the heads on their mortgage and proposing to save them from foreclosure.
The problem is that when a professional such as a real estate agent or loan officer presents a foreclosure “rescue” plan to an ordinary homeowner the homeowner may reasonable rely on the advice of such a person to their considerable detriment. The homeowner may reasonably assume that they are a client of the real estate professional and/or that the real estate professional is looking after their interests. The homeowner may unwittingly waive or fail to avail themselves of very important rights and opportunities.
In fact the interests of the homeowner and the real estate professional are diametrically opposed. The objective of the real estate professional is simply to obtain the property at far below market value. The “rescue” is in fact designed to fail and to result in the real estate professional obtaining the property.
Usually it involves the rescuer buying the property for far less than the market value then leasing it back to the homeowner. The homeowner losses the title to the property and under the advice of the real estate professional enters into a lease they cannot afford either. The net result is the victim losses their home and the equity as well as other far better solutions, such as refinancing or selling the property at a market rate.
Often the former homeowner will ultimately face eviction. Sometimes courts will enter the eviction but reserve other issues for later determination.
If you are facing foreclosure and you are approached by someone promising to save you from foreclosure you should contact an attorney before agreeing to anything or signing any documents. If you believe you are already the victim of a foreclosure rescue scam you should contact an attorney immediately.
An eviction notice is required for most evictions in Washington. However, case law establishes that such a notice is not required to evict someone after foreclosure. Twenty days after foreclosure the successful bidder at the trustee’s sale has an immediate right to possession.
