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If foreclosures loom, watch out for scammers

When New Jersey homeowners are experiencing financial difficulties and losing their homes is a real threat, some may resort to deals with scammers without recognizing the dangers. Any offers to prevent foreclosures must be considered carefully before any documents are signed. The usual warning of anything that seems too good to be true is probably a scam must be heeded under these circumstances. There will always be those who take advantage of individuals with financial problems.

Scammers often offer to help a homeowner with refinancing through another lender. However, the homeowner must first deed the property to this person as a measure to avoid foreclosure. The problem is that the refinancing never happens and the home will be the property of the scammer, while the mortgage holder will continue to hold the original owner responsible for payment. Signing over the property deed does not stop responsibility toward the mortgage holder.

Another trick is equity skimming, which involves a person promising to pay off the mortgage and giving the homeowner a portion of the money if the house is sold. However, the owner must sign over the deed and move out. The scammer then collects rent without paying the mortgage, and the lender forecloses on the property. Another lender may offer to refinance the property and lower installments to cover only the interest. When the payment term ends, the full amount that was borrowed will become due in one balloon payment, and failure to make that payment will lead to foreclosure.

These examples are but some of the methods utilized by scammers who take advantage of the misfortunes of others. New Jersey homeowners who are struggling to keep up with mortgage payments may benefit from consulting with an experienced attorney before accepting offers for help. A skilled lawyer can assess the situation and explain the legal options that are available to prevent foreclosures. This may allow the homeowner to make an informed decision that may lead to regained financial stability.

Source: FindLaw, "Watch Out for Foreclosure Scams", Accessed on Oct. 1, 2016

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