Foreclosure occurs when a homeowner is unable to make their monthly mortgage payments. Because of this, they are evicted from their home by the lender. The lender has the legal authority to do so according to the contract signed by both the buyer of the home and the seller, or lender. The house itself serves as a sort of collateral as stipulated in this contract.
While some lenders allow a grace period in which the payment can be made before the foreclosure process if initiated, this period usually lasts only a couple of months. Generally speaking, if the borrower is behind on payments, it will be that much harder to catch up on them because there are often late fees involved as well.
Each state maintains its own rules and regulations regarding the foreclosure process. There are several steps that must take place before the actual final step in which the lender seizes the property through the foreclosure process. Judicial foreclosure is the primary way of dealing with home foreclosures in twenty two states.
What this means is that the lender must go through the courts in order to prove that the borrower is failing to make their monthly mortgage payments. Other states use non-judicial foreclosure, which is also referred to as the power of the sale. This process is faster compared to judicial foreclosure.
If the courts approve of the foreclosure, the local sheriff will auction off the property to the highest bidder. This is intended to recoup what the bank is owed. In other words, the bank becomes the property owner in order to resell the property.
What Are Foreclosure Listings? What Are Foreclosure Listing Scams?
Foreclosure listings are databases containing information regarding property that is up for foreclosure. These online databases are frequently available free of charge, although there are also private foreclosure listings that can be obtained through a fee or subscription. Private foreclosure listings generally provide more recent information, and as such, can provide property seekers with access to more limited listings.
Recently, foreclosure listings have become increasingly instrumental in specific types of scams and fraud schemes. This is especially true in terms of online listings and public databases. This is why potential property buyers should always verify any information that is obtained from a foreclosure listing.
In terms of foreclosure listing scams, there are multiple ways in which foreclosure lists can be used. Some common examples of these include, but may not be limited to:
- Fraudulent Listings: Fraudulent listings generally include misinformation regarding property prices, dimensions of the property, and the condition of the property. Such intentional misinformation can lead to a foreclosure listing scam violation;
- Phishing: Phishing involves companies requiring that the property seeker enters their private information in order to access or use a list. The company then steals this information in order to commit identity theft, or some other type of virtual crime; and/or
- Credential Fraud: Listings may be used as a way for people to post fraudulent information regarding their credentials. This would cause potential seekers to put their trust into someone who is not qualified.
Because of this, it may be worth considering private listings which are issued by foreclosure experts. This may actually be safer, although it will likely cost a small fee to do so, because these sorts of listings are generally more reputable and dependable in terms of the information that they are presenting.
How Can I Avoid Being Involved In a Foreclosure Listing Scam?
First, it is helpful to further discuss foreclosure fraud in general. Increased foreclosures due to hard economic conditions provide criminals with additional opportunity to make a quick profit at the expense of vulnerable homeowners desperate to avoid losing their home. This is especially true when a housing bubble bursts, as predators will be actively looking for homeowners facing foreclosure and attempt to lure them in with promises of escaping their debt. Foreclosure fraud is a particularly sinister example of white collar crime.
It is important that anyone facing foreclosure is vigilant for anyone trying to sell a solution that gives them power over the ownership of their home, and/or their mortgage debt. Homeowners should also be extremely cautious when signing any written agreements regarding the home. This is because if it is later determined that the homeowner had any knowledge of the fraudulent activity, it could lead to legal consequences for the homeowner themselves.
Proving foreclosure fraud can be difficult because of the fact that most fraudsters disappear as soon as they obtain the necessary information or money. Homeowners facing foreclosure, as well as potential buyers, should always check the backgrounds and credentials of any parties that they are associating with whenever addressing foreclosed property. Additionally, they should try to obtain all terms in writing, especially regarding pricing and payment terms.
Another step would be to research the property through the county recorder’s office. Records of the property title should be available at this office, and interested parties can research the title history there. This can help catch any issues before moving forward.
Protecting yourself from foreclosure fraud begins with openly communicating with your lender. Your lender may be able to work out a deal with you, or provide you with legitimate resources. Be cautious in who you trust, and only work with trustworthy professionals and companies.
Remember that you alone are responsible for your mortgage; meaning, you cannot relieve yourself of this debt simply by signing it over to someone else, especially someone you do not know. Most importantly, keep in mind that you do not have to transfer ownership of your home in order to refinance it.
Foreclosure fraud is a criminal offense. Because this particular crime can involve other crimes at both the state and federal level, the potential penalties for foreclosure fraud charges can vary. Generally speaking, penalties vary depending on whether charges are pursued by federal prosecutors or state district attorneys.
Foreclosure fraud cases can be prosecuted either as felonies or misdemeanors. While most cases involve felony charges, misdemeanors are possible in cases involving small amounts of money, generally less than $2,000.
Do I Need An Attorney To Assist With Foreclosure Listing Scams?
Whether you are a potential buyer or a homeowner affected by a foreclosure listing scam, you should consult with an experienced and local foreclosure lawyer. As previously mentioned, much of foreclosure law is dictated at the state level, as are punishments for foreclosure fraud.
This is why it is advised that you work with an experienced and local foreclosure attorney. A local attorney will be best suited to understanding your state’s specific laws regarding the matter, and will be able to provide the most relevant legal advice in terms of how you should proceed.
An attorney can also help you research a property prior to putting in an offer, and can help address any issues that may be associated with the property in question. If you are the homeowner being foreclosed upon, your attorney can ensure all parties you are working with are credible.
In either case, your foreclosure lawyer will protect your legal rights, as well as represent you in court, as needed. Additionally, a local attorney can also help you stay informed of any new scams that are presenting themselves in the real estate market.