1. Contact your lender as soon as you become delinquent.
2. Seek the advice of a competent real-estate professional or attorney, recommended by someone you know and trust.
3. Do not transfer the title to your home to a third party.
4. Contact government agencies that can help you. They can be found at www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
5. Report any person or company who guarantees they will solve your problem. You can report real-estate fraud to the Utah Division of Real Estate at 801-530-6747 or by filing a complaint form: www.realestate.utah.gov/complaint_form.pdf.
Source: Utah Division of Real Estate
Wednesday, October 29, 2008
Reports of foreclosure fraud double
The number of reports of foreclosure fraud in Utah has doubled during the housing-market meltdown, and general complaints about real-estate schemes have increased 25 to 35 percent in the past year, the head of the state Division of Real Estate said Monday.
With so much turmoil, division director Mark Steinagel said his agency is offering advice to homeowners on how to avoid foreclosure scams, as the foreclosure rate in Utah has soared.
"A lot of the scams are repackaged schemes that have existed in the past," he said. "They're not new, but they are increasing in frequency."
A report this month from real-estate data firm RealtyTrac Inc. showed that the number of Utahns facing foreclosure increased by more than 136 percent in the third quarter of this year, compared with the same period in 2007. Utah had the 10th-highest rate of foreclosure filings in the nation for the third quarter of 2008, with 4,867 people receiving at least one foreclosure-related notice from July through September.
Steinagel said that while the number of homeowners struggling to keep their houses has increased drastically over the past year, so has the number of "fraudsters."
"They look for an opportunity, and they pounce on it," he said.
The crooks often hold themselves out as someone who can save people from losing their home. But in reality, the scam perpetrators are looking for vulnerable people, so they can "take their home or their money or their home equity," Steinagel said.
One of the main ways people can protect themselves is to verify licenses or credentials of people who offer help. If any red flags pop up, contact his agency, he said.
"If we are unable to take action against the person because what they are doing doesn't fall under our jurisdiction, then we have connections on the mortgage-fraud task force to do things," he said.
His division has compiled a list of the "Top Five Common Foreclosure Frauds." The top scam was people promising to save your credit by having you pay a fee and sign your home over to a third party. The scam perpetrators claim the foreclosure will be recorded against the third party. But in reality, the lender will record the foreclosure against the homeowner who does not pay as promised under the original mortgage.
Fraudsters also may offer to buy a homeowner's property and lease it back, with a promise the homeowner will have the option to buy it back. Fraudsters prey on trusting individuals to get access to their home equity, title, credit or money, the division said.
Crooks will sometimes say they have "a special relationship" with banks and can solve homeowners' problems quickly with no harm to their credit. Such claims are usually false, and there are no easy solutions to foreclosure, the division said.
Consumers also should be wary of offers of a "guaranteed short sale" that will "save" a homeowner's credit rating. Short sales can be a legal, effective method for preventing a foreclosure, but they are not guaranteed to be accepted by a lender, and they can affect a homeowner's credit.
Scam perpetrators sometimes urge homeowners to claim bankruptcy, the division said. But legitimate financial advisors typically recommend bankruptcy only as an absolute last resort, so consumers should weigh all alternatives before pursuing that option.
"One of the important things is for people to turn on their warning lights," Steinagel said. "When you're vulnerable, realize there are ways to protect yourself."
With so much turmoil, division director Mark Steinagel said his agency is offering advice to homeowners on how to avoid foreclosure scams, as the foreclosure rate in Utah has soared.
"A lot of the scams are repackaged schemes that have existed in the past," he said. "They're not new, but they are increasing in frequency."
A report this month from real-estate data firm RealtyTrac Inc. showed that the number of Utahns facing foreclosure increased by more than 136 percent in the third quarter of this year, compared with the same period in 2007. Utah had the 10th-highest rate of foreclosure filings in the nation for the third quarter of 2008, with 4,867 people receiving at least one foreclosure-related notice from July through September.
Steinagel said that while the number of homeowners struggling to keep their houses has increased drastically over the past year, so has the number of "fraudsters."
"They look for an opportunity, and they pounce on it," he said.
The crooks often hold themselves out as someone who can save people from losing their home. But in reality, the scam perpetrators are looking for vulnerable people, so they can "take their home or their money or their home equity," Steinagel said.
One of the main ways people can protect themselves is to verify licenses or credentials of people who offer help. If any red flags pop up, contact his agency, he said.
"If we are unable to take action against the person because what they are doing doesn't fall under our jurisdiction, then we have connections on the mortgage-fraud task force to do things," he said.
His division has compiled a list of the "Top Five Common Foreclosure Frauds." The top scam was people promising to save your credit by having you pay a fee and sign your home over to a third party. The scam perpetrators claim the foreclosure will be recorded against the third party. But in reality, the lender will record the foreclosure against the homeowner who does not pay as promised under the original mortgage.
Fraudsters also may offer to buy a homeowner's property and lease it back, with a promise the homeowner will have the option to buy it back. Fraudsters prey on trusting individuals to get access to their home equity, title, credit or money, the division said.
Crooks will sometimes say they have "a special relationship" with banks and can solve homeowners' problems quickly with no harm to their credit. Such claims are usually false, and there are no easy solutions to foreclosure, the division said.
Consumers also should be wary of offers of a "guaranteed short sale" that will "save" a homeowner's credit rating. Short sales can be a legal, effective method for preventing a foreclosure, but they are not guaranteed to be accepted by a lender, and they can affect a homeowner's credit.
Scam perpetrators sometimes urge homeowners to claim bankruptcy, the division said. But legitimate financial advisors typically recommend bankruptcy only as an absolute last resort, so consumers should weigh all alternatives before pursuing that option.
"One of the important things is for people to turn on their warning lights," Steinagel said. "When you're vulnerable, realize there are ways to protect yourself."
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