Foreclosures can be extremely stressful on the homeowner, and to tap into the misery of individuals and families faced with the unfortunate reality of a foreclosure, unscrupulous business people created a manipulative rescue option.
It is directed at mainly the poor and uniformed members of the public, by offering to assume ownership of the property on condition that the homeowner becomes a tenant. The deal is communicated as clearly and honestly as it should, but it results in a crooked arrangement which covertly undermines the ownership and equity of the victim.
The equity stripping fraudsters also known as rescue artists, usually act on foreclosures published in the press and are particularly keen on foreclosed homeowners who are ineligible for refinance or new loan options.
They establish contact and set up the closing date in a way that exerts more pressure and stress on the unfortunate individual or family. The victim will eventually surrender the title to the fraudsters or another third party often under illusion, that ownership is not being irrevocably transferred.
In turn the equity stripping practitioner or other investor will foot the outstanding foreclosure bill, which lands him the deed and the homeowner will be given a lease or a contract for deed.
And as can be expected, laws have been passed to regulate this rather dubious real estate service, in some states equity stripping is virtually prohibited. In some cases however, the foreclosure intervention services can be useful to the distraught homeowners.
It is very possible for a foreclosure rescue deal that comes with reasonable fees and follows the full guidelines on disclosure to work out in a helpful and professional manner. In such circumstances it serves a respectable purpose since all the other corrective channels including refinancing options will have failed to bring relief to a distressful scenario.
To the consumer faced with imminent eviction this is a critical recourse action as the opposite would lead to severe losses in the form of the equity. One of the ways that genuine foreclosure rescuers help the homeowners is by instituting another mortgage in a bid to recover the foreclosure threatened property.
The permutations for such an arrangement are that the rescuers will in turn charge the homeowner a fee or a slice of the equity, thus ensuring he/she averts eviction but rather gets to stay in the house (as tenant) with a view to liquidating the debt and eventually reowning the house by repurchasing it.