Convinced that home foreclosures will rise dramatically in the next two years, the chief economist for the Real Estate Center at Texas A&M University warns that a new scam threatens homebuyers desperately looking for a way out of financial stress.
“Predatory lenders now offer what they call ‘rescue loans,’” said Dr. Mark Dotzour, “but homebuyers are neither rescued nor do they actually receive loans.”
Here is how the scam works. The homebuyer gets behind on mortgage payments. The predatory lender offers a “loan to get caught up” on the delinquent mortgage payments. In exchange for the rescue, the homeowner signs over the title to the predator, who promises that the homebuyer may remain in the home while paying rent. The predator
then sells the house to someone else, and the original homeowner gets an eviction notice.
About a dozen states have passed laws designed to deter rescue loan fraud, but Texas is not one of them.
For full article, please go to the Real Estate Center at Texas A&M
