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WE BUY HOUSES SCAM-HOW TO SPOT THEM

July 20th, 2007 11:39 AM

We Buy Houses" Scams

How to Spot Them and How to Avoid Them

There are many reasons why a home owner would want to sell a house fast. Job change, relocation, debt problems, divorce and inheritance are just a few. Unfortunately, people in need also tend to attract predators who have no problem profiting from someone else's misfortune.

If you're looking to sell a house fast, here are a few scams to be on the lookout for and how to avoid becoming a victim yourself.

Equity Skimming

One of the most common types of "we buy houses" scams allows the "buyer" of the home to make off with most or all of your equity. It begins with you transferring your home's deed to the "buyer." The buyer may then have you make payments to him instead of the mortgage company, or he may have you move out so he can begin renting out the house.

There are several ways the buyer can then profit from this transaction. First, he receives some sort of payment every month — whether from you or from the renter. Second, he can use the equity in your home to secure home equity loans or other lines of financing. Third, he can simply resell the house without satisfying the outstanding mortgage.

Ultimately, once most of his profit is exhausted, he simply stops making payments on the mortgage and allows the home to go into foreclosure, because while he holds the deed to the home, he never assumed liability for the mortgage. As a result, you are left with a foreclosed home, no remaining equity and a significant black spot on your credit history.

Contract Bait and Switch

The contract "bait and switch" is a clever scheme that takes advantage of the trust between buyer and seller.

In one version of this scam, the home buyer inspects your house and makes a verbal offer that you accept. A few days later, he presents you with a written contract that he presents as "just a formal, legal version" of your verbal agreement. Because you believe it to be the same offer you had already agreed to, you simply skim it and sign on the dotted line.

In the time between signing and closing, he may also deliver one or more "minor changes" to the contract. He presents these as simply "a few tweaks" and nothing that really affects the original agreement.

At some point, though, possibly at the closing or even later, you discover that the last contract you signed actually bears little resemblance to the initial offer, and you are either stuck with a losing home sale or tangled in legal battles for months or even years to get out of the contract.

Liberian FSBO

This scam is an interesting twist on the Nigerian Scam or 419 Scam. In it, a person outside the U.S. contacts you after seeing your house on a For Sale By Owner site, telling you that he is looking to move to the U.S. soon and can pay cash for your home. His story is compelling to the point that you actually feel good about helping him out — not to mention being able to sell your home.

Ultimately, though, his only goal is to get you to transfer him money and/or to get access to your bank account so that he can transfer the funds himself before you realize what has happened. And because he is outside the U.S., recovering your money can be next to impossible.

How to Protect Yourself from Scams

Your Contact Information
First Name *	Last Name *
Home Phone *	Work Phone
Email*

Information on the Property That You're Selling
Address *
City *	County	State/Prov *	ZIP/Postal *

Estimated Value * $	Approximate Sq. Ft. *
Number of Bedrooms *	Number of Bathrooms *

No Submissions by REALTORS^® Please

If you need to sell a house fast, here are a few rules for protecting yourself from falling prey to a scam like these.

Only Work with Professionals

The best way to protect yourself from scams is to work only with professionals who have an established history of home buying. These days, anyone can order a book from an infomercial and become a "professional home buyer," but real professionals have been in business for many years and have closed millions of dollars in real estate transactions. Their primary concern is the health of their business, and they will not risk that by cheating you or otherwise treating you unfairly.

Check Out the Buyer

If you have any concerns about the buyer, don't hesitate to check them out. Contact your state Attorney General's office, your state's Real Estate Commission, or your District Attorney's Consumer Fraud Unit. If they are an established business, also check out the Better Business Bureau.

Always Understand What You're Signing

Not asking questions because you are afraid of looking stupid could end up costing you tens of thousands of dollars or more if you end up in a deal that wasn't what you thought it was. A lawyer or even your mortgage company can help you if you want professional advice from a third party. Never, ever sign a contract that you don't understand.

Get All Agreements in Writing

If a disagreement arises about a verbal agreement, the issue becomes your word against theirs and often must go to a court of law to be settled. Don't risk that. Insist that all terms be in writing, and don't agree to anything that isn't.

Be Willing to Walk Away

If you have any doubts about the buyer or the contract — or if it just doesn't feel right — just walk away. It's never worth the months (and maybe years) of future headaches to sell your house a few days sooner.

Conclusion

If something sounds too good to be true, it usually is. So don't get so emotionally tied up in the sale of your home that you abandon caution and logic. Your home is both a major financial obligation and a major asset. Falling prey to a scam like these will have major repercussions many, many years down the road — and maybe for the rest of your life.

Posted by Belinda Arroyo on July 20th, 2007 11:39 AMPost a Comment (0)

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Identity Theft- A growing menace

July 27th, 2007 7:59 AM

I felt that it was necessary to write about this subject. Also, to let you know what to do if it happens to you. It did happen to me. With technology the way it is , none of us are safe. I checked my credit report about six months ago. I noticed two things that were in error. I disputed it with the credit bureau and it was removed. About three months later, I received an email alert from one of my credit card companies that a large purchase had been made on my credit card. I immediately checked my account on line, and found that two airline tickets had been purchased from Southwest Airlines in Chicago to Las vegas , Nevada. I have never been to either place. I called the airline to dispute it and found that the tickets had already been used. I then called and emailed the credit card company to dispute it. They told me that they would investigate it, but it would take ninety days. One month later I received a strange call at 9 P.M. on my cell phone. The first thing the gentleman asked was had I checked my credit report lately? He then proceeded to tell me that he had met a Filipino couple that told him that they had a check that they could not cash, because they had no bank account.( We've all heard about this scam before) They asked him to cash the check using his bank account and I would guess that they promised him part of the check. He agreed to this. Needless to say, the check was no good. Even though it fooled him and the bank teller. He went to the police, but they were not able to do much. He then went looking for them on his own. He found them. They then took off running. (It was three of them.) One of them dropped a black notebook. He retrieved it ,and found numerous names with addresses, credit card numbers, social security numbers, telephone numbers, etc. All my information was included.The gentleman was angry because he had been scammed. He said that he did not want this to happen to other people , so he was calling everyone on the list.That is why he was calling me. He read me all my information. Even my email address.In case I thought that this was a joke.Believe me, I didn't think that it was a joke.He proceeded to tell me to call the credit bureaus and put a block on my credit. Also, to shred every document. This identity theft ring had the names of people all over the country. He then gave me his name and two numbers if I needed to reach him. I believed him , because I already knew about putting a block on your credit information.Also , that it is a good idea to shred everything. I thanked him and immediately put a block or fraud alert on my credit through the credit bureau. I even requested that they call me , if anyone applies for credit in my name. You have to protect yourself from this menace. It can be a living nightmare. If you think that your credit has been compromised, this is what you do:

Contact one of the major credit bureaus. They will alert the other two bureaus.

Request a fraud alert be put on your account.

Also, request a free copy of your credit report. If there is anything on it in dispute, let the credit bureau know. They have 30 days to resolve the dispute.

Always shred any bills or credit solicitations. Shred anything that you feel a crook could use.

For more information visit

www. Experian.com

www.Transunion.com

www.Equifax.com

Posted by Belinda Arroyo on July 27th, 2007 7:59 AMPost a Comment (0)

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Why Go on Budget?

July 9th, 2007 3:06 PM

Cheaper rates
Another upside to life on a budget is that it forces you to become organized. That, in turn, helps you avoid late payment penalties and improves your credit score. Lenders use your credit score to determine how much they should charge you for auto and mortgage loans. It also can affect how much you pay for auto and homeowners insurance.

Improve your relationship
A less obvious benefit of budgeting is the positive effect it can have on relationships. According to Siesta, sitting down with your significant other to discuss financial goals helps prevent money disputes down the road. It also provides a rare opportunity to define your own spending philosophies. "Money is a huge source of stress for many couples," he said. "The mere act of discussing your finances with a spouse or significant other really does help create better understanding and better relationships."

Saving for the future
Finally, learning to live within your means can help you get ahead. By allocating a portion of your monthly budget towards savings, you can simultaneously build a retirement nest egg for your future and a financial safety net for short-term emergencies, in case you or your spouse lose a job or suddenly fall ill.

"Budgets create financial security, which gives you the ability to withstand the financial surprises that life throws your way," Tehan said.

Budgets are all about financial freedom. Without a plan for saving and spending, you'll never make the most of your income -- no matter how much money you earn.

Posted by Belinda Arroyo on July 9th, 2007 3:06 PMPost a Comment (0)

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