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How to Avoid Foreclosure Scams

Written by Posted On Wednesday, 04 May 2016 09:27

As you know, foreclosures over the past 5 years have been at record levels and so have the foreclosure scams.  When there’s an opportunity or when there are people in pain… the dishonest and unscrupulous people in the world tend to come out of the shadows to take advantage of home owners.

Foreclosure scams in Colorado Springs have even picked up in recent years.

We talk with home owners in foreclosure every week.  You should hear some of the stories we’ve heard of people in foreclosure being taken advantage of by scam artists proclaiming to be reputable “real estate investors”.

Not All “We Buy Houses” Companies Are Created Equal

You’ve seen those signs that say “We Buy Houses Colorado Springs“… or websites like ours that mention the phrase.  Yes, we buy houses in Colorado Springs and I’ll walk you through how to spot potential scams vs. reputable house buyers in our area.

As a quick summary… there are companies out there that buy houses from people who need to sell.  In some cases… that’s where the similarities from the scam investors and legitimate companies with great reputations like us end.

In this article I’m going to walk you through some of the ways unscrupulous people and businesses try to take advantage of home owners like you.

This is meant to be a “consumer awareness” guide to help you spot the companies to avoid and pinpoint the “we buy houses” companies that you can trust (because the majority of home buyers are great people with great integrity… it’s those few bad apples that ruin it for everyone else.)

Warning Signs That You May Be Stepping Into A Scam When In Foreclosure

If you’re in foreclosure and are looking for a solution to avoid foreclosure and get foreclosure help in Colorado Springs, here are some “solutions” some less than honest companies may offer up.

Charge Upfront Fees To Get Mortgage Assistance From Your Lender – As Fannie Mae says, help is free.  Some companies will try to charge you for talking with your lender about your mortgage to find a solution. Don’t fall for this.  You can always talk with your lender about the mortgage and your options anytime with no charge, or work with a company who will do your loan counseling for you for free.

Signing Over The Deed To Your Home To “Save” Your House – This sounds backwards from the start. Some unsavory companies may tell you that you can sign over the deed to your house (essentially giving up ownership) to save your house from foreclosure. As Fannie Mae says, never sign over the deed to your house unless you’re working with your mortgage company to forgive your debt… or unless you’re selling your house to that company and moving.  If that’s the case, ask the company to hold all meetings at a reputable title company so everything is on the up and up (always consult legal advice before ever signing over your deed).

Don’t Unknowingly Give Up Ownership To Your Home – Some ways scammers have targeted home owners are by telling home owners they’ll pay off their mortgage.  With these scammers they hide clauses in the paperwork that sometimes gives up your ownership rights to the house and transfers them to the scammers.  A reputable company will be fully transparent, no hidden clauses, and everything will be known before any documents are signed.  Always consult your own expert to review any paperwork before you sign anything… even when working with a very reputable company!  No reputable company will pressure you to sign paperwork without giving you the chance to sort through ALL of the fine print yourself.

They Try To Say You Don’t Need A Title Company or Other Professionals In Selling Your Home – Selling your house, whether you’re in foreclosure or just need to sell quickly, should be done with the help of certain professional services.  With every house we buy, we always use a neutral 3rd party Title Company to handle the closing, drawing up the closing documents, and all related paperwork.  It instills confidence with the house seller and it makes sure there’s no funny business on either side of the transaction. If a house buyer says you’re going to do a “kitchen table closing” (actually signing all of the papers in your house) rather than a title company or attorneys office… ask why.  Kitchen table closings can work, but using a title company or attorneys office helps protect both sides and makes sure things are done right.

The Mortgage Payment Scam – Some disreputable dealers have pulled a mortgage scam where they instruct the home owner to pay mortgage payments to them (rather than the bank directly) and the scammer will then “handle paying the bank”.  In no circumstances should you do this unless you get your mortgage company’s approval in writing. Some of these scammers will then pocket your payments and not pay your mortgage company at all… destroying your credit and putting you in a worse situation than you started.

(Source: Summary of information from the Fannie Mae info site)

Do Your Homework And Do Business With Someone You Can Trust

We buy houses in Colorado Springs and help people in foreclosure every week. So we know the market well and have seen lots of dishonest things happen to home owners who were duped by a scammer before they found us.

What we always say is to do your homework.  Ask any quick sale company lots of questions before you do business with them to make sure that they’re real, that they’re honest, and that they can and will follow through with any offer they make you.  Some investors make lots of offers and back out on the ones they don’t have the money to close on. With Seller Solutions, we only make offers on properties that we know we can close on if our offer is accepted… no if’s and’s or buts.  Do not hesitate to run any paperwork you're given through your lawyer before making any decisions.  If a deal sounds too good to be true, it probably is.

Be smart, avoid foreclosure scams in Colorado Springs.

If you’re in foreclosure and need assistance, or just want to know your options… visit your local foreclosure counseling service or browse this site and schedule a free Foreclosure Prevention session with one of our foreclosure experts.  Or, if you’re looking to get a cash offer on your house, we’d love to chat with you and learn about your situation and your house.  We are in the business of making fair all-cash offers to motivated sellers within 24 hours of our talk.  We can close at your convenience.  We have developed our process with the homeowner's best interests in mind; there’s no obligation, no pressure, and no catch.  We make you an offer, you take as long as you want to look over, have our offer looked at by a legal expert, or even shop the offer around before making any decisions. We’ll be here for ya and you can get started whenever is right for you.


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