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Mortgage forbearance scams – what to look out for

Top 5 Mortgage Forbearance Scams – What to Look For

WHAT IS MORTGAGE FORBEARANCE?

Forbearance is when your mortgage servicer or lender allows you to temporarily reduce your mortgage payments or pause paying your mortgage for a limited time. Forbearance is not automatic. You must request it from your mortgage servicer. Forbearance does not erase what you owe. You will have to repay any missed payments or reduced payments in the future.

MORTAGE FORBEARANCE CARES ACT

The CARES Act provides mortgage forbearance to any homeowner with a federally-backed mortgage. During the pandemic, your lender cannot deny your forbearance request, nor can it demand proof of financial hardship.

The CARES Act initially set forbearance protection to expire on Dec. 31, 2020. However, the program has since been extended to March 31, 2021 June 30th, 2021. Keep in mind that June 30th is the deadline to request forbearance. The date your forbearance period ends is 360 days from the day it begins.

BEWARE OF SCAMS – WHAT TO LOOK FOR

Phony Counseling or Phantom Help

  • Any fee is a red flag
  • Never send a mortgage payment to a service rather than your Lender

“Forensic Audit”

  • A review of bank documents to see if the lender complied with the law

Rent to Buy Schemes

  • Borrower is told to surrender title to the Fraudster
  • The claim that you can rent it from them now and buy it back later
  • The terms are too expensive to sustain or increase over time
  • Former owner is evicted and scam artist sells it and realizes all of the equity that the former owner may have had in the house

Equity Skimming

  • Fraudster offers to find buyer if you sign over deed and move out
  • Former owner is promised some of the equity when it sells.
  • Fraudster rents the house out and pockets proceeds but doesn’t make payments
  • Foreclosure proceeds and the consequences are still on the Former Owner

Bait-and-switch

  • Fraudster gives consumer papers to sign in order to get another loan to make mortgage current
  • Buried in the stack is a document that surrenders title in exchange for the “rescue loan”

ARE YOU A POSSIBLE VICTIM OF A SCAM?

To determine if you are a possible victim of a scam, ask yourself these two questions:

  1. Were you told you had to pay a fee to obtain counseling services?
  2. Were you guaranteed a loan modification or asked to do any of the following:
    • Sign over title to your property
    • Redirect mortgage payments
    • Stop making loan payments

REPORT SCAMS


FREQUENTLY ASKED QUESTIONS


WHAT HAPPENS AFTER FORBEARANCE ENDS?

A forbearance plan doesn’t erase the amount you owe on a mortgage. At the end of the forbearance plan, you must repay missed amounts, but not necessarily all at once. You will not be charged late fees during your forbearance plan as long as you are performing according to the terms of the plan.

CAN I SELL MY HOUSE DURING FORBEARANCE?

Yes, your bank may allow you to sell the house while it’s in forbearance. If it’s clear that you will not be able to make your mortgage payments, and a loan modification isn’t a good option, then, if it’s clear that you’re attempting to profitably sell your property the bank can even help you by extending the forbearance plan.

To avoid selling your home as a last resort, please contact me to discuss what are all your available options during this time. The information is complimentary, and there is no obligation. My contact information is below.


How to get a Complimentary Mortgage Forbearance Information Resource Guide

This complimentary Mortgage Forbearance Process information resource guide provides a rundown of some popular options for borrowers whose forbearance period is coming to an end. Plus, a list of current relief programs available to you, with additional resources and links.

This information is presented to you simply as resource, with no obligation, just a good starting point where to seek help. Please use the contact form below to receive it today!

Mortgage Forbearance - What are my options?

    Note: If you are requesting the complimentary printed guide, it will be mailed via USPS, the following business day. Thank you!


    YOUR COLORADO SHORT SALES & FORECLOSURE RESOURCE (SFR®)

    Natalia Blackie
    Broker Associate, REALTOR®
    Short Sales & Foreclosure Resource Certified (SFR®)

    RE/MAX Alliance
    9737 Wadsworth Parkway
    Westminster, CO 80021
    Direct: 720-507-4784
    E-mail: nblackie@remax.net


    ©2021 Natalia Blackie – RE/MAX Alliance – Short Sales & Foreclosure Resource Certified and Realtor®. This information is copyrighted and cannot be used without express written permission.

    About Author

    Natalia Blackie is a licensed Colorado Real Estate Agent specializing in Residential Homes Sales in the Denver Metro and surrounding areas. Her background includes over 20+ years of Marketing experience.