International Buyers Beware: Foreclosure Scams on the rise in US
Many savvy international real estate investors are aware of the soft US real estate market right now. Almost every real estate property website and newsletter is filled with hundreds and thousands of bank foreclosure listings. Many of these listings are in top vacation states or in highly desirable parts of the country. At these deeply discounted prices, one may even consider purchasing one of these properties as a second home or as a vacation rental home for long term investment purposes. But with thousands of websites advertising bank foreclosure properties, beware of the many new foreclosure scams.
Many of these scams prey on suffering homeowners with currently devalued properties. But as a potential investor, the “Bailout” scam is one to look out for. In this scam, the “Rescuer” gets the desperate home owners to surrender their title to the house, convincing them that they are making a deal to become a renter and will buy back the home over the next few years. Homeowners, are told that someone with better credit can secure new financing to prevent the loss of the property, are cajoled into surrendering the title.
The “Rescuer” then lists the property on the market and sells it to unsuspecting property investors. By this time, a buy back becomes impossible for the original homeowner for they have permanently lost possession, and the “rescuers” leave with all or most of the home’s equity. The property investor now holds title to the dream rental income property, but is stuck with an unwanted tenant that has little chance of fulfilling monthly rental fees and potential litigation costs.
There is no one better to safeguard your future investment than yourself. Doing your research and working with reputable advisors is the best defense against fraudsters.