Imagine your home being taken away from you – out of the blue. Imagine what your parents or grandparents would face if, overnight, they didn’t have a place to live. You’re baffled and heartbroken. How did this happen? You’ve been making every mortgage payment; you’ve worked for this home. And now it’s gone.
Suddenly, you’re on the street with nowhere to go; the life you built is back to zero. Where would you go from here?
Such a scenario is difficult to imagine, and one you never want to face the reality of. To call being the victim of a homeowner’s scam “a nightmare” doesn’t even sum up the harsh reality.
But it is a reality. Every day scammers are throwing bait to homeowners and reeling in the catch; leaving homeowners as vulnerable as a fish out of water.
The Story Of One Victim
The Washington Post ran a story recently about a 68-year-old woman named Barbara Barkley from Chesapeake, Virginia who lost the home she planned to live in for the rest of her life to a ring of scammers.
“I literally lost everything because of these people, and it’s breaking my heart,” she said.
Barkley had her home designed especially for her, with lowered counters and handles, to accommodate her 4'10" stature. Now she’s renting a place from a relative in North Carolina.
The ringleader of the group of scammers, Sammy Araya, was sentenced to 20 years in prison. But even with that, Barbara will still never live in her home again.
The scam went like this: Araya and his group sent out mailers and Internet ads that promised mortgage modifications. Homeowners who responded to the program were told to send a cash “reinstatement” fee followed by monthly “trial payments” for their new monthly mortgage. They were told this money would go to their lender.
But that money went straight into the pockets of the scammers, while they ignored the desperate calls from homeowners.
Only after a warning of foreclosure was pasted to her door did Barkley learn that she was the victim of a scam. And when she called the Federal Trade Commission, all they could tell her was, “Honey, you’ve been scammed,” and there was nothing that could be done.
Old Tricks In New Forms
Scammers are seriously devious and are always coming up with new ways to trick you. You must stay extremely vigilant and watch the backs of your family members too – especially the older members.
Below are some of the ways scammers target homeowners:
Sending personalized letters to homeowners facing foreclosure.
Running ads on the Internet, TV, radio, newspapers, on flyers, etc. with deceptive messages such as, “Stop foreclosure now!” or “Get a loan modification!” or “We have special relationships with banks that can speed up the approval process.”
Using a rent-to-buy scheme in which they tell homeowners to surrender the title to their home and stay as a renter, then buy it back later.
Offering a property assessment on the value of your home for a fee, then just taking the fee.
How To Stay Vigilant With Homeowner Scams
Any time you’re asked to give personal information in exchange for a specific service, be very suspicious.
Usually you need to seek help to refinance or modify or mortgage. To do that, your current lender needs to approve and sign off on the change. And that would never happen over the phone or by email with a third party.
There’s typically a catch to every scam. You’re asked to fill out a form or wire a fee “to get started.” Don’t do it.
Avoid any “business” that:
Only accepts cashier’s checks or wire transfers.
Tells you to make your mortgage payments to them instead of your lender.
Pressures you to sign papers.
Guarantees they can get you a loan modification or stop the foreclosure process.
Claims that most “customers” get loan relief.
Asks for an upfront fee.
Note: Contact your lender if you are having trouble making your mortgage payments or received a foreclosure notice.
Legitimate help is out there. By staying informed and doing your research (whether for yourself or a family member) and keeping the above points in mind, you can avoid this type of scam, and keep your home away from the bad guys.