5 Common Foreclosure Scams Auburn Bankruptcy Attorneys Fight

Auburn bankruptcy lawyer fights foreclosure scamsIn falling behind on your mortgage payments, you face the very real risk of foreclosure. In addition to being stressful, foreclosure is frightening.

Although there are viable solutions for getting out of this situation, unfortunately, some people prey on innocent people at risk of losing their homes.

To avoid being a victim of a foreclosure scam, you need to know what to look for by considering the following and talking to an Auburn bankruptcy attorney.

Scamming Opportunities

  1. Equity Stripping – In this case, a mortgage lender that is aware of your financial situation may try to sway you to take out a larger mortgage as a means of paying off the original mortgage. The problem is that payments on the new mortgage are higher. Although it takes care of the initial financial problem, soon you’ll begin struggling to make the higher payments each month. Since the new loan “stripped” most, if not all, of your home equity, there is nothing for you to fall back on. Ultimately, you will lose the home to foreclosure.
  2. Scams by Lenders – Another scam involves a lender recommending a refinance using an interest-only loan. Again, this may work for a while since the monthly payments are more affordable, but at some point, a significant balloon payment comes due that is hard, if not impossible, to pay. Instead of helping, an interest-only loan makes the financial situation worse.
  3. Equity Skimming – You may be convinced to sign over your property as an exchange for someone else making the payments. With this, the buyer of your home rents the property, thereby collecting money from tenants each month. However, the buyer pockets that money instead of making the mortgage payments. Once the loan falls far enough behind, the lender starts the foreclosure process against your home. If at any time someone recommends this solution, you should first contact an Auburn bankruptcy attorney.
  4. Loan Flipping – In this situation, the lender may suggest that you refinance the home loan, which would give you extra money for paying bills, putting cash in the bank, or taking a much-needed vacation. While this sounds great, the fees and other costs associated with refinancing are significant. In fact, these expenses are often so high they wipe out any benefit of refinancing. This type of scam is all about getting more money out of your pocket before foreclosing.
  5. Fake Loan Transactions – Fake loan deals involve a lender refinancing your mortgage loan and providing you with documentation that makes it look like the loan was brought completely current. However, without reading the fine print and understanding the documents you are asked to sign, you could very well be transferring the title of the home to the lender for an extremely low dollar amount. Before signing anything, have the documents reviewed by a reputable attorney.

If you are worried about losing your home to foreclosure, you need to talk to an Auburn bankruptcy lawyer. We can determine the most viable solutions for your unique situation.

A qualified bankruptcy attorney in Auburn is fully aware of these and other foreclosure scams. As a result, the attorney can offer you protection in the form of knowledge. If the only way to save your home is with bankruptcy, you need the best Auburn bankruptcy lawyer in your corner. To schedule an appointment, please contact us.

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