The internet is the greatest friend in the world – it can also be your enemy. Mortgage and loan brokers, refinancers, mortgage re-conveyers and even “mortgage rescuers” can use the internet to track down vulnerable homeowners.
Whatever their title, or what you call them, their purpose is to steal the equity in your home – “Equity Stripping”.
These people easily find the value of your home, amount of equity you have, what creditors you have and how many times you’ve refinanced your home. They can go to websites and find out your entire life story (websites where you tell all your friends you wish you could go on a vacation, need a new car, need money for medical issues or you ran out of money in the middle of remodeling).
These ‘brokers’ normally target lower income homeowners who have a lot of equity in their homes but have difficulty borrowing money. These distressed homeowners are promised upfront cash. Happy with the cash, the homeowner is stuck with a home equity loan that’s far beyond what they can afford. When the homeowner can’t make the high monthly payments the house is foreclosed on and sold at a profit.
Another tactic used is to get the homeowner to sign their deed over to the ‘broker’ so they can “secure better terms”. In many instances, the homeowner unknowingly transferred their deed to a “straw buyer or stand-in buyer”. Once the property title is transferred, the homeowner is promised the mortgage lender will be paid off and the home can be “rented” back to them. The buyer borrows much more than the homeowner agreed to, pockets the extra cash and the homeowner is left with no equity and a huge mortgage payment. A company in New Jersey bilked thousands out of their homes by getting clients’ deeds. They pocketed an average $80,000 per home. When authorities closed in, the company was gone and so was all the cash leaving the homeowners in foreclosure.
In January 2012, some type of foreclosure filing was made on a total of 211,000 homes. That’s 3% more than December 2011 and works out to 1 in every 624 homes.
A very old rule of thumb is to make sure your home payment doesn’t exceed 28% of your monthly income. Don’t agree to any home equity loan if you know you won’t be able to afford it. Be wary of advertisements offering “quick and easy loans”. If something seems too good to be true, it usually is.
If you’ve already fallen into the cavern of foreclosure, or facing foreclosure, it’s recommended you contact a Foreclosure Defense Attorney immediately. These attorneys specialize in mortgage fraud and may be able to help you stay in your home.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.