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When trying to stop a foreclosure, don’t be fooled by a quick fix

For a homeowner who is trying to save their home and stop foreclosure, any solution is a good solution. Unfortunately, despair may not allow them to see things clearly.

There are foreclosure solutions out there that are scams and can leave you homeless or simply with less money. Although not all of these companies run scams, you should be careful when deciding to try any of the solutions below.

Loan Modification Company – One solution to foreclosure is to speak directly with your lender and try to reach a mutually beneficial agreement that stops the foreclosure. For some, this solution may be fixing the interest rate, while for others, it may be the elimination of late fees. Loan modification is very successful, however when you hire a loan modification company you need to be careful. Typically you pay the company a flat fee up front and if you are working with a dishonest company they will take the fee and you will never hear from them again and you are right back where you started.

Straw Buyers – Refinancing is often a solution to help with foreclosure, however to refinance you need to have a strong credit history. To avoid this, some people will work with a front man who will sign the new home loan with you. Although both names will be on the deed, the original owner is responsible for the mortgage payments, not the front man. Hypothetically, once he’s on his feet, he would refinance the front man’s house back into his own name. However, in the meantime, if you get ripped off, the front man will take all the equity in your house (since your name is on the title) and leave you with a house you can no longer afford.

Subsequent lease – Like front men, another option is leaseback. This is when someone actually buys your house from you and leases it to you (rents it) for a set period of time until you can buy it back from them. In some cases, the new owner will take all the equity out of the home and raise the price so that it is no longer affordable. Otherwise, if you are a day or a dollar short on your lease, the new owner will cancel the contract he made with you and leave you homeless.

All of these foreclosure solutions can be done honestly to make them successful for homeowners. However, when a scammer does it, it can put your home in jeopardy and leave you in more trouble than foreclosure. Avoid this by doing your research and speaking with a qualified foreclosure attorney before making any decisions.

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