Prime "scam" time... sellers beware!

There are many sellers desperate enough to respond to the inviting "we buy houses for cash" signs as a way out of short sales or foreclosure. In this market trend, those running scams of this sort are in their prime.

But beware those that approach, offering too good to be true bail outs of your credit or foreclosure problem. From an old, but more relevant than ever Scripps Howard News Service article back in 2005.

Steve Tripoli, consumer fraud investigator for the National Consumer Law Center in Boston, interviewed numerous state attorneys general and legal aid staffers for the NCLC's June 2005 report, "Dreams Foreclosed: The Rampant Theft of Americans' Home through Equity-Stripping Foreclosure 'Rescue' Scams."

Tripoli found that foreclosure "rescue" scams fall into three main categories:

_ Phantom help: The "rescuer" charges outrageous fees for light-duty phone calls or paperwork that the homeowner could easily do, none of which results in saving the home. This predatory scam gives homeowners a false sense of hope and prevents them from seeking qualified help.

_ The bailout: In this scam the homeowner is deceived into signing over title with the belief that they will be able to remain in the house as a renter and eventually buy it back over time. The terms of these scams are so onerous that the buy-back becomes impossible, the homeowner loses possession and the "rescuer" walks off with most or all of the equity.

_ The bait-and-switch: In this scam, the homeowners think they are signing documents to bring the mortgage current, but instead actually surrender their ownership. They usually don't even know they've been scammed until they're evicted.

"Rescuers" often place ownership of the property into a trust in the owner's name in order to avoid the "due-on-sale" clause in most mortgage contracts. They then transfer ownership through the trust to themselves or to a front operation. In these instances, the mortgage company is unaware that anything is amiss; the homeowner, however, is frequently left on the hook to pay the mortgage on a house he or she no longer owns.

The last "bait and switch" method is the story I've heard the most, and is perhaps the most heart breaking. I can't say enough, if you are approached by someone offering to purchase your home under these circumstances... or if you aren't entirely clear on just what the circumstances are... find your Realtor® and ask for some help deciphering just what is about to transpire when embarking on such a transaction.

There are legitimate "buy houses for cash" investors. But the circumstances need to be right, and the contract language examined closely for repercussions. If you aren't sure - and remember, always in writing, in writing, in writing... believe no verbal promises - then ask for help before signing anything!