The Council of Better Business Bureaus has issued an alert to stem what it says is a growing number of incidents involving lenders who prey on heavily indebted homeowners.
With rising interest rates driving an increase in foreclosures, unscrupulous lenders are combing through public records for victims, the council reports.
“At-risk homeowners are bombarded with offers that arrive by mail, over the phone or are tacked to neighborhood telephone poles,” said Steve Cole, the council’s president and CEO, in a press release. “Smooth-talking salespeople appear, eager to buy their property and promising to ‘save’ their home by paying off the amount that is overdue on the loan.”.
Sometimes, homeowners are talked into moving out and deeding the property over to a third party. They are told they can rent their former home with the option to buy it back later, but often can’t make rent and are evicted, Cole said. When homeowners try to buy back the property, the “scam operator” usually sets a price they can’t afford.
Homeowners may not only lose the equity in their homes, but find themselves entangled in a bigger mess. In many cases the initial mortgage is not paid off by the scammer and the deed is never transferred. As a result, Cole said, the homeowner faces eviction from the home and still owes for the original loan amount.
The Council of Better Business Bureaus advises homeowners who are feeling overwhelmed by debt to first talk to their mortgage lender. If the lender won’t agree to restructure or refinance a loan to make payments manageable, the next step may be to sell a house pay off the mortgage.
The council recommends selling the house yourself or through a reputable real estate firm and licensed agent.
Homeowners who decide to use a “home buying service” that promises debt relief should check their credentials with their local Better Business Bureau, state attorney general and state real estate commission.
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