Unfortunately, in this downtrodden economy we currently find ourselves in, it is not uncommon to fall victim to a scam while looking for honest help. To make matters worse, there are individuals out there who make a living off of preying on homeowners who do not speak English, and whom are unaware of the laws in place to protect them.
Having been in the Escrow business for longer than I care to admit, I have found more than my fair share of fraud when examining a property title report; and more often than not, the homeowners are completely oblivious that what they partook in several years ago was in fact illegal. Through this article I hope to shed some light on one of the more common examples of fraud that I come across, and one which homeowners should avoid at all costs.
The fraudulent activity which I see relatively frequently in short a sale transaction is when homeowners deed their property to fake companies or to unknown people. As of the past few years this has become more and more prevalent, and the reason behind the increase in this type of fraud is simple: FORECLOSURE. Believing that they have no other alternative to save their home from foreclosure, they will deed a portion of their property to another entity, thus creating a cloud on title and preventing the foreclosing party from being able to foreclose without doing additional legal work. This “fraud as a last ditch attempt” is a direct result of homeowners in default looking for ways to keep their property, and there are A LOT of “unsavory” companies out there who are just waiting for the opportunity to sell a little bit of false hope for a lot of money.
What homeowners don’t understand is that they can’t trust just anyone to help them; they need to do their own research and make sure that what they are being offered is in fact legal. It may be a little extra leg work, but at the end of the day homeowners who have done thorough research on their chosen “solution” will be able to sleep easy knowing that they are not going to be stuck with any consequences down the line.
What should homeowners look out for? Well, the biggest red flag and best way to avoid this type of trouble all together is to avoid granting or deeding their property to anyone, or even adding them on to title. So in summation, the only sure way to avoid being taken advantage of (and being implicated in fraudulent activities) is to do research and to have a solid understanding of what exactly you are signing/doing. Follow these three steps and you should be OK:
- Research the company you are about to work with.
- Research what they are suggesting you should do.
- Get a second opinion from another professional.
What can you do to help? All you have to do is spread the word! After all, educating each other about known dangers, is the only way to ensure they will be avoided.
Feel ask any questions you may have in the comments section below!
Contributor, designer & admin for JohnHart Gazette.
