Equity stripping scam is also known as equity skimming, and some individuals will call it foreclosure rescue scheme, which is when below average earners deal with foreclosure.
This situation indicates that a homeowner will be receiving money along with illogical payment methods, or deceitful details are concealed in the contract so that the fake lender can get a hold of the title of your house or foreclose on the particular property.
Scam specialists perform these scams, and they are excellent at what they regularly do. If you are going to prevent being the prey of this sort of operation, then you must know how to distinguish these specific frauds and take necessary preventive measures.
How Do Foreclosure Rescue Scams Happen?
Equity scammers mark lower-income households with lots of equity built up in their properties. Scammers usually advertise (sometimes by knocking on your home door, or over mail) quick cash and painless rates for a house loan that can help in reducing the burden of your mortgage settlements.
Even if you do not already hold a ton of equity built up, or if you are not striving financially, you could still become their target simply because these criminals are opportunistic individuals.
By fooling you into an excessively costly monthly payment or by hiding particular contract details that will trick you into a high payment method, these scammers are always counting on you to lose the home. In that very moment, the scam artist will foreclose the home and, the victim will be left homeless TodayKos.
There is also a variation in which the scam artist will gain the confidence of the homeowner to sign over the deed to the particular property which is known as equity skimming.
Scam artists execute this by telling the owner they can “acquire better courses” to help you prevent property foreclosure. However, they, of course, do the exact opposite, and that is to expel you from your home and then rent or sell the property for their gains.
Do you Find Yourself Vulnerable?
Equity tricksters are equal opportunity scammers, and the particularly unsafe ones are homeowners with below average incomes but have a large price of equity, it is because low-income owners always have a tough time borrowing cash.
If you are in this position, you may desire to refinance to get financial resources out, for instance, but legit banks would not help you. But, hiding from equity scammers is not an option, that is because you are easy to locate.
Like for instance, to commence their mortgage scam, scammers may blanket addresses in a specific community with a direct mail campaign ensuring quick cash and comfortable rates WowYar.
How You Get Caught by the Scam?
Of course, you do not need to grab the lure, but in case you did, this is what usually happens:
Scam artists pretending as money lenders will offer you a loan that is within your financial means or will encourage you to spend your earnings on a credit application. By pursuing a home loan with extremely high monthly fees, they are expecting on foreclosing on your home when you drop behind the loan.
The scammers will take your property, take good advantage of it by selling it. Meanwhile, you are left homeless and labeled as a victim of an equity stripping scam. In a different version, equity scammers will convince you to confirm the contract to “secure better conditions” or prevent a feared home foreclosure.
Then the scammers will sink the agreement details under a huge pile of paperwork, usually charging expensive transaction as well as closing fees.
Upon the transfer of home title, scam artists will guarantee to secure the mortgage lender and execute a rent back to the property you no longer own. You might find yourself spending more cash on rent than your loan payment, and when you lag behind, you are out and of course, evicted.
Scammers may then “inherit” the home you can no longer financially manage by paying the mortgage, at a higher price than they were offering you.
How Can You Prevent it From Happening?
Sadly, there is no specific action to hide from equity stripping scammers. If you are in a situation where you are struggling to earn enough money but have a huge amount of equity, chances are, you are easy to spot.
On the bright side, just because these scammers can spot you does not indicate you have to become a victim of their indecent schemes. The most significant thing to keep in mind is never to trust an unaccredited or independent lender.
Remember only to accept trusted local organizations like Ashe Morgan or corporate banks. If you want to cut down your regular payments, then consider refinancing. The fact is no lender can support that specific situation, and one who claims to is most probably a scammer.
Nearly all people who belong to the low-income group are likely to fall in the too-good-to-be-true schemes, and these scam artists will only make use of these unfortunate people’s situation. As a result, they tend to be victims of cruel plots.
If you are struggling financially, take note that it is always best to consult trusted organizations than these magical offers, it is to have the law in your favor.
Yassi Parrish is a freelance writer who specializes in finance. When available, she loves to share her knowledge about business and finance to her readers. At home, Yassi makes sure to spend time with her family.