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What Are Equity Skimming Scams?

Jan 21, 2008
Equity stripping is also called equity skimming and some people will term it foreclosure rescue scam, which is when low-income earners face foreclosure. It was late 1999 that some equity scammers took the properties of low-income earners, such as their homes. It happens so because, they took loans and never pay in time or did not fulfill the conditions of the loan. At times some money lenders lend out their money at a very high interest rate. So, these homeowners are made to even rent their own homes form these money lenders as tenants. This equity stripping scam issue usually happens to low-income earners who own a home. This equity stripping scam issue usually happens when the low-income homeowner has entered a complex transaction with a money lender; the homeowner will be unaware that he or she is selling the property. Some few years back, most states in the United State have looked for a means to fight against all these unscrupulous money lenders.

Many people may look at equity stripping as a means of lending money to people and taking excessive money as charges. That is, removing the homeowner out of the home if the charges are not paid. This practice often shows foreclosure.

Trends have been made in the United States economy to open a market so that foreclosure, equity stripping scam is legal. This has made the values of properties to increase between 2000-2005. As the values have increased, the rate of foreclosure in 2001 has risen leaving the many foreclosed low-income earners with equity.

Homeowners may notice that they have fallen into foreclosure, when they find their names on newspapers or reported by a mail distribution service.

Solicitation can take place, when a homeowner has been foreclosed. That is some other person may still meet the foreclosed homeowner for another deal, if he or she is qualify to take a different loan for a commission to be paid to this person who is making the arrangement . When a home has been foreclosed, an investor can still come and pay the amount owed by the homeowner and acquire the home. The investor may still will back the home to the homeowner under a different condition (lease or contract deed). The homeowner then remains in the house and pays rents. But, there are laws in most of the states today that protects equity stripping scam, which was passed into law since 2005. At times, this foreclosure stuff may be beneficial, when the charges of the loan are low. The foreclosure stuff can be beneficial to the homeowner, when here arranges and still stay in the house as a tenant, but later on you can still repair your credit and own the home again.

Home owners facing foreclosure should be very careful about who they talk to as there are many scammers out there only interested in taking away their homes. There are many government run agencies in every state where the home owner can turn to. One of the most important things is for the home owner to talk to their lender.
About the Author
Eric Mabo is an Atlanta foreclosures Expert. He helps people find discounted real estate deals. His Website is http://www.doyenrealty.com
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