How Homeowners Can Protect Themselves from Foreclosure Rescue Fraud
In Rutherford County, Tennessee, financial hardships are a part of life for many. Some homeowners, desperate for a lifeline, consider home equity loans or mortgages that use their house as collateral. Yet lurking in the shadows are deceitful entities capitalizing on this desperation with sham offers of financial aid that come with shocking twists.
Imagine thinking you’ve secured a loan or a mortgage to stave off foreclosure or settle immediate debts, only to discover—sometimes years later—that the so-called “helpful” organization has seized the title of your home, and at a far lower value than it’s worth. The cruel irony usually reveals itself when homeowners miss a payment on their “loan” and receive an eviction notice for the property they thought they still owned.
As an attorney at the Legal Aid Society of Middle Tennessee and the Cumberlands, I’ve seen multiple clients navigate these treacherous waters. The recurring theme among these homeowners is their inability to secure traditional financing, often due to poor credit history or insufficient income. Their limited financial resources make them ripe targets for these unscrupulous scammers.
While the law does offer some protections for homeowners who fall prey to these so-called “foreclosure rescue” schemes, untangling the legal mess can be a prolonged, emotionally draining ordeal. If it goes to court, the process can take months or even years to sort out. The court may decide to undo the transaction and return the legal title to the homeowner if it’s proven that proper disclosures weren’t made, or that the “lender” acted fraudulently. However, if the adverse party had actually spent money for the homeowner’s benefit—like paying off existing mortgages, property taxes, or insurance—the court might require the homeowner to repay those amounts.
The bottom line? It’s a stressful, time-consuming, and financially draining experience that no one should have to go through. Prevention is by far the best strategy; it’s infinitely easier for homeowners to avoid these traps than to extricate themselves later. Stay informed, and stay wary to safeguard your most valuable asset—your home.
