Common Prescott Arizona foreclosure myths

Prescott AZ Foreclosure Myths

I got a call the other day from a client in Prescott Valley who was having some financial problems and was considering signing over her home to a company that would rent it back to her, allowing her to “save her credit score.”

I had heard of this type of arrangement before.  This is one of the common scams out there and I advised her to Google the company name before moving forward.  She found out that it was a scam.  I’m glad she called, but I bet lots more don’t.

Here’s some common myths that are out there about foreclosures:

MYTH: My mortgage company would rather foreclose on my home than keep me in it.

 The mortgage company sustains an average loss of about $58,000 when foreclosure occurs (TowerGroup study). They are in the business of providing mortgages – not owning or selling homes – and would always prefer to keep you in your home.

MYTH: Foreclosure is an uncommon problem, I am all alone in this.

Foreclosure is a challenge faced by millions of Americans every year from all walks of life. Rich, poor, young, old – the list is as diverse as society itself.  In our area, they are from Prescott, Prescott Valley, Chino Valley and Dewey-Humboldt.

MYTH: I have only missed one payment , I can likely catch up.

The most important thing to remember when playing catch-up with your mortgage is you owe any delinquent payments plus the current month’s payment. So, if you’re a month behind, you actually owe two payments – last month’s and this month’s.

Free Nationwide Foreclosure Search

MYTH: I am getting many offers of help from a variety of people. Are they all scams?

Because of the public nature of foreclosures, anyone is able to access foreclosure listings on a daily basis. These include the owner’s name and address at the very least, and in some states, they could include other sensitive information. Armed with this data, scammers can take advantage of a desperate owner.

Here’s what to look for to avoid foreclosure scams:

1. Your home’s ownership changes hands. A common scam is where a party buys your home, then lets you rent it back. It sounds good at first, but you’re losing your property, and your new landlord can now legally kick you out of your home with little to no notice.

2. You’re asked to pay something up-front and/or you’re asked to stop making mortgage payments. Usually, these scams involve paying large sums of money to some sort of “foreclosure prevention service.” These services offer to do what our counselors do: counseling, a budget and approaching the mortgage company to consider a payment plan. But the services don’t do always do this work thoroughly, or follow through at all. The most important thing to remember when it comes to any foreclosure service is this: Foreclosure advice and direction should always be free.

3. You’re under pressure to act immediately. Some will prey on the stress and anxiety surrounding the foreclosure process by convincing owners to sign things they don’t understand. Don’t sign anything without either first talking to an attorney, your mortgage company or a nonprofit foreclosure prevention organization like the Homeownership Preservation Foundation.

MYTH: It is impossible to stay in my house after foreclosure proceedings begin.

Contrary to what you might think, there are still options available to you after the foreclosure process has started. The sooner you get help, more tools are available to help you fix your situation. See our Tips for Preventing Foreclosure for more help.

More posts on the topic from around the blogosphere:

The Five Biggest Foreclosure Myths

Foreclosure myths by Las Vegas Homeowners!!!!

Common Myths- Homeownership Preservation Foundation

Loan Modification Myths Dispelled for Homeowners Facing Foreclosure