| Beware of Foreclosure 'Rescue' Scam |
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 With rising  Foreclosure rates comes a new scam that targets homebuyers looking for relief from financial woes. Some predatory lenders now offer what they call 'rescue loans,' but homebuyers are neither rescued nor do they actually receive loans." Homebuyers who purchased homes with subprime loans are especially vulnerable and predatory lenders are targeting subprime borrowers who have some equity built up in a home but who are having difficulty meeting monthly mortgage payments.
Homebuyers with impaired or nonexistent credit histories often turn to subprime loans and ARMS (adjustable rate mortgages) despite the higher interest rates and rising rate risks that comes with them. Once in financial trouble, it is difficult for these borrowers to refinance their mortgages to an affordable rate fixed mortgage.
Here is how the scam works. The homebuyer gets behind on mortgage payments. The predatory lender offers a "loan to get caught up" on the delinquent mortgage payments. In exchange for the rescue, the homeowner signs over the title to the predator, who promises that the homebuyer may remain in the home while paying rent. |
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