There are a number of scams being played out in the distressed Las Vegas real estate market. They target individuals desperate enough to make poor decisions. As a buyer it’s important to be aware of these scams so that you do not get caught up in costly litigation, or have your purchase delayed. This article explains the five most dangerous scams. Below is an excerpt from the article.
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Scam No.1: The Buy-to-Rent Play
Buying from someone who is the victim of a rent-to-buy scam can leave you with a legal mess that takes time and expense to clear up. Here is now the scam works…
A homeowner is under water and has been served with a notice of default. They are approached by a company proposing that since they have better credit than the homeowner that they can refinance the loan and solve the problem. The owner just needs to surrender title to their home, and they can remain in the property on a rent-to-buy contract while the refinancing is arranged. The former homeowner can hardly believe their luck because they are paying the same as their mortgage, can remain in their home, and will not have a foreclosure on their credit history.
However, the reality is that the company takes title with a promise to assume the loan without a real intention to repay it. They simply collect rent from the former homeowner up until the default, and make no attempt to refinance the loan. The foreclosure is then recorded against the original borrower.
It may seem like an elaborate scam just to get a few months rent, but consider that some foreclosures can be delayed by as much as eight months, and these scam artists have many victims to generate thousands in bogus rents each month. The crux of this scam is that many victims do not realize that transferring the deed does nothing to transfer what they owe on the mortgage.To read more subscribe via the box above.