A homeowner facing foreclosure may be willing to try anything to save his or her home.  Homeowners
who do not proceed cautiously at this point may find themselves the victims of a foreclosure scam.

When it comes to foreclosure scams, the best way to protect yourself is to know what to look for. 

Another common foreclosure scam involves an individual or company approaching you with an offer  to negotiate with your lender for you.  You are asked to pay the individual or company a substanstial upfront fee for this service.

The only problem is that individual or company isn’t in contact with your mortgage lender at all,  the individual or company simply keeps your money, and the foreclosure continues on its original time line.

One mistake that you won't want to make concerning foreclosure scams, is believing that the individual in front of you is different.  The desperation and depression that accompany a foreclosure situation can cloud your judgment. 

If you are presented with a contract or legal document to sign, don't do so until you can have it reviewed by an attorney.  Be sure to choose your own attorney, not one suggested to you by the individual or company.

A homeowner facing foreclosure may be willing to try anything to save his or her home.  Homeowners
who do not proceed cautiously at this point may find themselves the victims of a foreclosure scam.

When it comes to foreclosure scams, the best way to protect yourself is to know what to look for.  Although foreclosure scams come in a number of different formats, many are easy to spot. 

Be wary of the companies and individuals that approach you by mail, telephone, or in person.  Be sure to read all dosuments that you are requested to sign.

In one type of scam the individual or company offers you a new loan.  However, the documents you are given to sign are not loan documents. The documents you sign may actually turn over the property ownership to the individual or company in question, with you, the former homeowner, remaining as a tenant at a high rental rate.  

The scam artist will pocket all the funds you paid to obtain the "loan" and any rent payments you make.  The scam artist will never contact your bank or pay any money to your bank to bring the loan current.  The foreclosure will simply continue on its original time table; and the scam artist will be long gone.

Principals or agents?  What’s the difference?

Private mortgage lenders are typically high net-worth individuals or pension funds.  They are principals or people with money.  Sometimes those principals delegate certain loan origination functions to loan brokers (who are agents).  Some of the common functions we perform for our private mortgage investors are:  due diligence, loan structuring, financial analysis of a borrower,  valuation of the subject property, identifying an ability to repay the loan, and determining the credit-worthiness of a borrower.

How many agents in a private mortgage loan transaction are too many?   I think that question can be answered by asking another question; what value does the agent bring to a transaction?

Private mortgage transactions are  expensive money relative to the conventional loan products out there.  The reason for that is that the market for private money is far smaller than conventional loans.  Loan brokers who specialize in this niche spend months cultivating an investor before the loan is made.  A loan broker will show an investor a number of loan transactions before finding one that is suitable for their risk tolerance.  The transaction gets more expensive when more than two brokerages are involved.

We share our brokerage commissions with originating loan brokers.  Let me explain that for you.  If a loan broker calls us with an inquiry, we are able to act quickly upon it.  Two reasons why loan brokers use us as a source are:  (1) we have a reputation with investors for offering them legally compliant, sound loan offerings.  (2) We have a large number of investors at our disposal.

Does a consumer get a "better" deal by coming to us directly?  No, they don’t.  We still charge the same fee for  our services, we just elect to share it with the originating broker for certain loan origination tasks they perform. The Real Estate Settlement Procedures Act (RESPA) requires that a test be met before a loan broker can earn a fee (or a portion of the fee).    We follow RESPA to the letter of the law.

If you’ve applied for a loan from a loan broker in California and she is merely passing on the information to another broker, they really aren’t adding value to the transaction just costs.  That is the last thing a borrower needs when facing foreclosure or needs quick money.

Brian Brady

(858) 777-9751

In California, the first legal notice that sets the foreclosure process in motion is the “Notice of Default”, often called by investors “N O D”.

This notice is filed with the county recorder, and becomes public record. Anyone searching public records can find it. Foreclosure data companies such as RETRAN, REDLOC, REALTY TRAC, and many others republish these public records daily.

If a Notice of Default has been filed against your home, you may be surprised at the number of phone, mail and even email solictions you receive.

While many of these contacts are from legitimate investors, be aware there are many scammers that also troll public records on a daily basis.

Some scammers may offer to take over your mortage payment while you get back on your feet, or even give you some cash, if you deed your property to them. Then they’ll offer to rent the home back to you.

You think they are going to make the mortgage payment for you, but they don’t. They will simply pocket the money you are paying in rent. Since you are still responsible for the mortage, you still loose the house.

More information at http://www.consumerlaw.org