Provided by the law office of:
Michael Kennedy Karlson, Esq.
Admitted to practice before the Court of New York State
and the Federal Courts of the Southern, Eastern, Western and Northern Districts of New York

Scams to Avoid:  There are a lot of crooks out there. The things listed below are some of the most common scams. Crooks are clever, so they will come up with new scams. Watch out for things like this:

The Call You've Been Waiting For.
(Big Increases in 2009)

           After getting a frustrating and confusing runaround involving several different people at various different departments at the bank you finally come home to a message on the answering machine from "Geoffrey", or some other first name, "at the loan modification department" (he never says the name of any bank). He says "I have the application you submitted and I, uh, think you may be eligible for a loan modification to help you avoid foreclosure." Sounds wonderful.
           Firstly, it's a recorded message. But unlike the recorded messages that try to sell you satellite TV, this one tries NOT to sound slick and professional. They try to make it sound like someone leaving a message on an answering machine, complete with pauses and "uh" and other gimmicks to make it sound realistic.
            Secondly, despite any claims that "we've spoken before" or "I have your application" this is just cold calling. People who live in rent-stabilized apartments are getting these calls too. They don't care if the guy in the rental apartment thinks they're crazy. They aren't getting any money out of him anyway. They want the distressed borrower to think that this is a personal call specifically for them.
              Of course, since they're trying so hard to mimic the real bank employees, you have to be careful you don't ignore the real call thinking its fake. The real bank employees should know which bank they work for. 

Anyone Who Wants to Put Their Name on Your Deed:

        They'll usually tell you that you can't refinance because of your bad credit, so you need to put someone else's name on the deed. If you do this person may refinance for far more than the amount needed to pay off the mortgage, at a horrible interest rate, and then disappear with the difference. This leaves you far deeper in debt, at a worse interest rate and with their name still on your deed which further complicates things. I heard of someone going along with one of these and having his $80,000 mortgage refinanced for $180,000 then the person disappeared with $100,000 and left her name on the deed. A variation on this is the lease-back, where they lease the property back to you with perhaps the promise to sell it back to you.

Anyone Who Says You Don't Have to Show Up For the Closing:

        Stay Home. Sleep in. They'll go to the closing for you. It's boring anyway. Sitting around some office signing lots of papers, picking up certified checks. Your absence gives them the possibility to refinance your home for more than the old mortgage and pocket the difference.

They Choose Your Attorney For You:

        Sometimes you're told that you have to have an attorney, but they'll provide the attorney for you. You are entitled to the attorney of your own choosing. You are entitled to someone whose loyalty is to you because you found that attorney, not some attorney who may have  conflicted loyalties because it is really some other hand that feeds him or her. I've even heard of people showing up for closings and meeting their pre-picked attorney only when they got there. Over $20,000 went missing from that closing.

Stall Tactics:

        Many of those who want to rip you off will want to drag you right down to the wire with stall tactics. This can be combined with any other scam so as to limit your options. It can be combined with an old bait & switch. They promise to find you refinancing at a reasonable rate, but there is always one delay or another. Finally at 5pm the day before the foreclosure auction you're told that they can't get you that loan, but they did find you another loan. The interest is high and the points are worse. You could walk away, but the clock is running out. Probably the evil re-fi was the only one they were ever going to offer you, but if they had told you that two weeks ago you would have walked away. If someone is stalling you, WHY.

You Won't Really Have To Pay This Off At That Rate:

        Don't worry about the evil re-fi interest rate. This is just an interim solution. Use the evil re-fi to get out of foreclosure, then you can get a good re-fi to get out of that. If it was so easy to get a good re-fi why did you need the evil re-fi? Remember those stall tactics? You may see that again when you're trying to get out of that bad loan. Of course, there are also costs each time you re-finance.

        Home                                                                    Stages of Foreclosure   
                                                                                      From polite reminders through eviction

        Negotiated Settlements                                         Special Types of Foreclosure
        Loan Modifications, Reinstatements,                   Co-op's, Real Estate Taxes, JER, XSpand  
        Short Sales, Deed-in-Lieu

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