Encountering difficulty in making scheduled payments on a debt can be a stressful experience for New York homeowners. This is especially true for mortgages, as the inability to make agreed-to payments can cost a borrower their home. The process of a lender taking back and potentially selling a home due to a borrower’s failure to make scheduled payments is known as foreclosure.
Foreclosure can be a lengthy and complex process that involves various required legal filings. The stress that homeowners experience during this process can cause them to seek help from sources that they would otherwise disregard. This makes these borrowers ripe for being victimized by foreclosure fraud. Many homeowners may wonder what foreclosure fraud is and what they can do to prevent it.
Borrowers can identify foreclosure fraud if they are more educated on the foreclosure process. First, a lender will provide a note of delinquency to the homeowner, along with instructions to bring the mortgage current. If the homeowner is unable to remedy the situation, the lender may push forward with a foreclosure sale. At this point, a borrower may make a large payment or agree to a modified payment plan with the lender to correct the delinquency. Otherwise, the lender will be able to sell the home and seek any remaining amount due from the delinquent borrower after the sale.
Foreclosure fraud signs that homeowners should watch out for are notices from companies advertising a secret method to correct the delinquency, those that seek upfront payment to correct the issue and those that attempt to speed or slow down the foreclosure process. Additionally, if the lender merely fails to follow required procedures, they may be attempting to defraud the homeowner as well. Those subject to foreclosure actions would be wise to understand the process as much as possible to protect themselves from such scams.
Source: HowStuffWorks, “What is foreclosure fraud?,” Matt Cunningham, accessed on Nov. 8, 2015