How to Avoid Short Sale Scams

Posted by Roderick WoodsJun 01, 20190 Comments

If you are considering a short sale as a way to avoid foreclosure or bankruptcy, you may be wondering how to find an experienced foreclosure defense attorney. Short sales can be extremely beneficial for homeowners who would rather relinquish possession of their home than file bankruptcy or lose their home in foreclosure proceedings. In a short sale the lender is able to recoup the majority of what he or she is owed. As long as your home can be sold for fair market value, most lenders will consider accepting proceeds from a short sale as payment in full.

Hiring legal representation to help you negotiate the terms of your short sale is key to avoiding short sale scams and pitfalls. You have a much greater chance of avoiding future legal complications if you have an attorney from our firm advocating on your behalf. Here are some of the short sale scams we can help you avoid:

Undisclosed payments: Lenders often try to take advantage of individuals whose situation has left them highly motivated to complete a short sale as fast as possible. Some of the tactics they may employ constitute loan fraud. If you have a lender requesting you make a payment outside of escrow, keep a payment off the settlement statement or fail to disclose specific details of the sale to all of the involved parties, do not go forward with the sale until you speak with your attorney. This short sale scam could result in you being accused of fraud.

Flopping: Flopping is the practice of making a below market an offer to the seller for the sole purpose of buying the home and then immediately reselling it to a higher bidder. In many of these cases, the reseller already has another buyer lined up. As soon as the short sale goes through, he or she can have the property close at a much higher price. If you are the seller, you could be left having to pay taxes on any portion of your loan the bank forgives as a result of a low sale price. Flopping can be perpetrated by any individual, however it is not uncommon for a seller's realtor to be the individual benefiting from the short sale.

Predatory Short Sale Negotiators: If you are considering a short sale, it is likely due to the fact that you have found yourself unable to keep up with mortgage payments. Your desperation to get your property sold can leave you susceptible to scams from con artists posing as short sale negotiators or debt negotiators. These people will attempt to convince you that they can guarantee results, providing you agree to pay them either a flat fee or a portion of the proceeds from your short sale. Many of these so-called experts are simply trying to rob you of money that is rightfully yours. If you are considering hiring a short sale negotiator, you are advised to seek legal counsel first.

The Woods Law Firm, LLC is a highly-respected foreclosure defense law firm focused on being the unrelenting advocates homeowners need when facing foreclosure. Our attorneys are exceptionally qualified to not only advise you of the various options available to you, but we are committed to providing you with the aggressive representation you need during such a difficult time. Do not let yourself be taken advantage of during the short sale process. All you need to do is call our firm and schedule to meet with a Connecticut foreclosure defense attorney as soon as possible. You will be glad you did.