Central Mortgage Blog

1. Don’t sign any papers you don’t fully understand.
2. Beware of loan assumptions where you are not formally released from liability for mortgage debt and contracts of sale.
3. Check with a lawyer or your mortgage company before entering any deal involving your home.
4. If you’re selling your home yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer.
5. You can contact the State Attorney General, the Real Estate Commission or the local District Attorney Consumer Fraud Unit for this type of information.
Remember that every individual’s factual situation is different and you should seek independent advice from an attorney regarding your personal situation.

Solutions that sound too simple or too good to be true usually are. If you are selling your home without professional help, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial situation. Be especially alert to the following:

1. Equity Skimming: In this type of scam, a “buyer” approaches you, offering you to get you out of your financial trouble by promising you to pay off your mortgage or give you a sum of money when the property is sold. The “buyer” may suggest that you move out quickly and deed the property to him or her. The “buyer” then collects rent for a time, does not make any mortgage payments and allows the mortgage company to foreclose. Remember that signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.

2. Phony Counseling Agencies: Some groups called themselves “counseling agencies” may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself, for free, such as negotiating a new payment plan with your mortgage company or pursuing a free foreclosure sale. If you have any doubts about paying for such services call a HUD-approved housing counseling agency. Do this before you pay anyone or sign anything.