Beware of Mortgage Scams: #2 – Mortgage Rescue

Today’s low mortgage rates brings with it mortgage scams for every type of homebuyer. In this 5-part series, we will talk about mortgage scams you need to be aware of as you look to secure a loan for your first home or your new home in this market.

#2 –Mortgage Rescue

With so many homeowners struggling to make ends meet, scammers have found a new way to scam homeowners.  Offering to “rescue” you from your mortgage, these scammers prey on high equity homeowners who are struggling to pay their bills or facing foreclosure.

Presenting themselves as a way for you to stay in your home while you get back on your feet, the scammers offer to pay your mortgage while you pay them “rent.” The promise includes the provision to “buy back” your home once you have caught up your payments over a set amount of time. 

You sign over the deed to the “rescuer” and they are to pay the mortgage company while you pay a smaller rent payment for a set amount of time.  However, in most cases, the scammer pockets the rent and does not pay the mortgage, which is still yours even though the house is not.  The loan to the mortgage company goes unpaid, the house is foreclosed upon anyway, and your credit is still ruined and you are without your equity as well.

Beware of these scammers. They are especially predatory for senior citizens who have built a lot of equity in their home but have been burdened with additional debt from medical bills and family issues.

Read about more scams in our ‘Beware of Mortgage Scams’ series.