Struggling With Your Mortgage Payments in a Harsh Economy? Not All Promises of Help Are Legit.

There are deep problems in the U.S. housing economy—including for deed holders. And today, for many households coping with inflation, oil price surges may be the last straw. This financial pressure will likely create many more targets for the grotesque business of promising mortgage relief in order to snatch equity from homes.

You might have seen the story about Kimberly, a widow living in Georgia. She couldn’t pay the mortgage anymore. So she looked for help from a mortgage rescue company called Homesaver911. Transferring ownership of her property to this company through a warranty deed seemed like a good idea at the time. Now, she faces eviction and has suffered serious, stress-related mental health events.

Kimberly’s story is stark. But it’s hardly unique. It has some messages for deed holders who may have difficulties weathering a prolonged oil price shock.   

Promises, Promises

The company promised to return the deed after Kimberly’s financial situation stabilized. Things didn’t turn out that way. From Homesaver911, the deed was transferred to the Georgia Venture Investment Company.

Insisting that Kimberly agreed to a supposed past sale, Georgia Venture Investment started the process for eviction. This company said Kimberly had agreed to sell her home, but failed to follow through. Kimberly never agreed to any such thing, she told WSB-TV reporter Justin Gray. Georgia Venture Investment’s lawyer told the TV station that the company tried to send a payment to Gravitt. But her family says she got nothing.  

Legitimate help to avoid foreclosure really does exist. But before we talk about that, one more story will highlight just how careful a deed holder has to be. There are some professionals out there—real estate agents, notaries, even lawyers—who set up investment companies and go looking for homes that are easy to take from current deed holders.

Sanford S. was a New York lawyer. Lost his license, but he was. He would introduce himself to stressed-out deed holders, telling them his law practice focused on mortgage relief. He could head off foreclosures by setting up short sales through partners at banks. The deed holders might receive a portion of their home’s value—one reported getting paid a sum less than $15K—with the promise of a more substantial payment when the homes sold. These arrangements would get them back on solid financial footing, but first they’d need to move out of their homes.

Then this self-styled mortgage relief specialist would record their deeds in his name, leaving the victims with their mortgages and without their homes. After a string of such exploits, the swindler was convicted last year in a Brooklyn courtroom.

Guard Your Equity From Mortgage Relief Fraud

By now, you get the picture. Look out for “mortgage consultants” claiming to offer “foreclosure rescue.” Scams occur in the tens of thousands annually. It’s likely they’ll pick up steam in an economy that is stretching budgets past their limits.

Red flags? There are several:

• You’ve received an unsolicited text, call, email, or home visit. Everything might look official. But contacts out of the blue are often unsafe.

• You’re asked to submit a fee up front. The deed holder should not pay for assistance unless and until they are offered (and agree to) a mortgage modification from the actual mortgage lender.

• You’re asked for your signature—which could be exploited by scammers who use a deed holder’s identity to wrongly quitclaim the deed.
• You’re told the representative will start working on your case, but you’re unsure what your total bill will look like.
• The representative wants you to transfer the deed to your home—perhaps claiming it will be transferred back later, after loan modifications. Legitimate assistance providers will not ask you to give up your title.

• The representative says you’ll be paid if you sign your deed over so your home can be transferred in a short sale. This kind of foreclosure rescue arrangement might be a trap. Watch out especially for language that suggests your title will be transferred in the process.

• There’s a need for haste—your decision, signature, or payment is needed in a hurry.

We should note here that it’s not wrong for lawyers to charge in advance for some part of their work. If you decide to work with a lawyer, be sure that the person is admitted to the bar of your home state and is described as “active” on the state court system’s attorney directory. Actual lawyers working in the mortgage support area are subject to state bar rules on fees, trust accounts, and client funds.

The First Step to Take: Call the Mortgage Lending Company

Today’s economic conditions are harsh. Many households are just about managing to pay the bills each month. Prices are going up and inflation isn’t expected to cool any time soon. Banking interest rates are not due for a cut anymore. The central bank may even raise rates next.

When money’s as tight as it is today, anxiety over possible foreclosure can lead deed holders looking for solutions. Scammers feed off the worries that many borrowers have. Some schemes ask the owner to quitclaim the home so a company can sell it. But the company is expecting the deed holder to move, so it can exploit the home’s value. The owner still has to resolve the mortgage—but now, without control over their remaining equity. The deed holder’s now in a worse position than before.

So, if you have concerns about falling behind with the mortgage, call up the mortgage company first. There may be options for you to consider that can help.

If necessary, call the federal government to be connected with a mortgage specialist who can offer counseling for foreclosure avoidance. The Department of Housing and Urban Development website has more information. If your mortgage is an FHA loan, call the Federal Housing Administration.

For the Deed Holder, Knowledge Is Power

Homeowners should be aware that real help does exist. They should also know what real help looks like—and how to spot the other stuff. Recognizing common scam tactics can empower a deed holder to steer clear of traps designed to take the equity from a struggling household.

Transferring the deed to your home is as simple as finding your current deed, then using the right deed form, having the completed deed properly signed and notarized, then recording the deed. But sign your deed away for a mortgage relief company? No way.