mortgage

5 mortgage scams

Avoid lease/buy-back agreements
Baby got lease/buy-back agreements

Thanks to public records, con artists in many states know when a home is in foreclosure. Once they identify distressed borrowers, they persuade them to sign a quitclaim deed, which transfers the property ownership into a land trust.

In lease/buy-back mortgage scams, the perpetrator promises the deed transfer is temporary and you'll be able to rent the home from the new owners and eventually repurchase the home after you get back on your feet.

You are told it is necessary to sign the document so the company can make the mortgage payments and stop the foreclosure process. In addition, the scammer presents a lease/buy-back agreement, which specifies how much the borrower will pay in rent and explains that the borrower has the option to buy back the property after a certain period.

Depending on how much you owe on the home, the scammer may simply collect the rent from you and let the bank throw you out on the street or lock you out and sell the house themselves.

"If people are coming to you asking you sign away your home so they can make payments for you, run for the hills," Sullivan says.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
MORTGAGE & REAL ESTATE NEWSLETTER

Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.

Blog

Holden Lewis

Cautious BofA heeds history

Remember the wise decision that Bank of America made in August 2001 in light of the decision it's making now.  ... Read more

advertisement
Partner Center
advertisement

Connect with us