Sunday, March 31, 2013

Protecting Homeowners from Mortgage Relief Scams



Guest Article by Sarah Parr
 
Protecting Homeowners from Mortgage Relief Scams
By Sarah Parr

The United States has some of the most deceiving businessmen today: mortgage relief scam artists. They exploit, profit from and give concerned homeowners who are behind on mortgage payments a false sense of security. Scam artists may look through newspapers or foreclosure filings at courthouses and government buildings and target clients from areas known as centers of foreclosure activity. Advertisement may come in the form of door-to-door solicitation, flyers on telephone poles or roadside signs or traditional web, radio and television advertising.
Mortgage relief scams are difficult to decipher, so here are a few tips to avoid encountering a scam.

Before reaching for your wallet…
Qualification of specific government programs that aid in the loan modification process or foreclosure defense is free, according to PreventLoanScams.org. It also doesn’t cost a cent to speak with a government agency-approved housing counselor. Nevertheless, homeowners frequently report shady companies that charge clients for access to government programs and housing counseling. If a homeowner rescue company asks for a large amount of money upfront for access to the latest government program or a recent mortgage settlement, it could be a sham. Information for housing counseling and government relief programs can be easily accessed online. Homeowners should also be cautious of companies that advise homeowners to pay mortgages to them and not to the loan provider.

Nothing is promised
Foreclosure protection or the modification of a loan is never promised, and access to specific government programs may only be guaranteed for some borrowers. Disappointingly, mortgage relief scam artists will try to persuade someone that a loan modification or foreclosure defense handled by their company is guaranteed. A scam artist may pretend to be a member of a legitimate organization approved by, or affiliated with, the government and state that a homeowner qualifies for a specific government program that aids in foreclosure defense or loan modifications.

Detecting phonies
In order to appear authentic and reliable, scam artists will do anything these days. Non-attorneys often pose as attorneys who only offer loan modification services, according to the New York Times. Consumers should be suspicious of these firms, especially since most law firms include loan modifications as one of many services. Some law firms even pose as non-profit groups that offer loan workouts or forensic loan audits.

Another kind of scam artist, the “foreclosure rescuer,” may convince a client to transfer the title or sell his or her home, and then tell the client to stay in the home as renters. They will reassure the former homeowners that they will be able to reclaim the house once they’ve recovered financially. However, the scam artist will be able to evict the victims and claim the home.
People on the verge of losing their home should watch out for the scams covered above. Also, homeowners who would like a loan modification or who are at risk of foreclosure should never avoid any communication from their lender. Free foreclosure counseling is provided by government agency-certified housing counseling agencies, or by contacting the Homeowners’ HOPE Hotline.

Friday, March 29, 2013

5 things to ask a home inspector

     As some of you know I do a lot of different things related to residential real estate. I teach home improvement classes through Workshop for Women, I am a certified home inspector and I am also a licensed real estate broker.  Through all of these endeavors it is my desire to educate others on the joy of home ownership.
     A telephone call from a young woman prompted this article.  This young woman called the office to schedule a home inspection and ask to speak directly to an inspector to ask some questions before making the appointment.  Since no inspectors were readily available the scheduler asked if there were any questions she could answer.  They young woman asked, "Well, does your inspector have a lot of tools?"  I have to admit this made me laugh. I don't mean to make light of what was obviously a serious question but I don't believe the answer, which is yes, tells her anything about the home inspector's skill level.

     Here are 5 questions to ask when interviewing a home inspector or home inspection company:
  1. Is the inspector licensed (if that is required in your state) or certified through a nationally recognized professional association (if your state does not require licensing)? Two nationally recognized associations are:  ASHI (American Society of Home Inspectors) and NAHI (National Association of Home Inspectors).  For those of you who live in Colorado it is important for you to know that there is currently no requirement for home inspectors to be licensed or even certified in our state. 
  2. Is the inspector and the inspection company covered by Errors and Omissions (E & O) Insurance?  Errors and Omissions insurance covers you, your broker and the inspector in the event something is damaged or missed during an inspection.  None of us are perfect and we all make mistakes, the important thing is that everyone is protected in the event of a problem.  An example of how E & O insurance protected the inspector, the buyer's real estate agent and the buyer: "...during the course of a February home inspection, the inspector shut off the power to the property’s furnace in order to inspect the furnace filter. Upon completion of the home inspection, the inspector neglected to turn the furnace’s power back on. The property owner returned to the home a few days later to find the furnace off and the water pipes frozen. The pipes burst, causing tens of thousands of dollars in damage as the result of an innocent mistake."  This example was taken from an article in the ASHI Reporter.
  3. What will the inspection cover? A professional home inspection should cover the entire home and all of the major systems, components and mechanical equipment.  This includes, but is not limited to, the following:  Landscaping (drainage, retaining walls, exterior structures, concrete, etc.), Exterior (siding, windows, window wells, etc.), Roof (roof covering, gutters, flashing, chimney, etc), Attic (structure, insulation, ventilation, exhaust vents, etc), Plumbing, Electrical, Furnace, Air Conditioning, Kitchen, Bathrooms, Finished interior, Structure, Basement and Crawlspace.  An inspection will typically take 3-4 hours depending on the size and age of the home. Please visit Pillar to Post for more information about home inspections. (This is why the answer to the young woman's question is YES!)
  4. What additional testing do you recommend? A home inspector can only inspect what he/she can see, regardless of what you see on TV, and there are additional inspections that may be required.  Most home inspectors can perform Radon testing in addition to your visual inspection but it will be for an additional cost.  Go here for more information about radon. You should also consider getting a 'sewer scope'.  This test involves a qualified person inserting a camera into the main sewer line to uncover any potential problems with damage or blockage.
  5. When do I get the results of the inspection? A reputable home inspector should be able to provide you with your inspection results at least by the end of the day of your inspection.  Ideally, if you are able to attend the inspection you should be able to leave with a hard copy of your report.  Pillar to Post home inspectors will print out a hard copy at the completion of the inspection and email an electronic copy of the report to you by the end of the day.
Of course there are many other questions that you could ask but these are a must!