Use of HOA Liens Contribute to Scams
DENVER – The Colorado Division of Real Estate is aware of a new twist to the home equity skimming scams through the use of HOA liens. Many Colorado consumers may be experiencing some financial hardship during this time. Beware if you are living in homeowner associations (HOAs) and are not able to pay your HOA dues and assessments. You may be approached by someone to “rescue” you. PLEASE be careful! Search homes for sale Flying Horse Colorado Springs at http://www.rehava.com
Typical Skimming Scheme
In a typical equity skimming scheme, the scammer has the financially-strapped homeowner transfer the property over to them. They agree to lease the home back to the homeowner, who remains there as a tenant. This is done with the promise that the scammer, in return, will pay future HOA dues and assessments. They also promise to pay the outstanding mortgage, in exchange for the homeowner paying them future monthly rental payments. The scammer leads the homeowner to believe that they will be released from all those obligations.
In reality, the scammer will not make the promised payments to the mortgage company and HOA. They will keep the monthly payments or skim the equity off the property. If there is substantial equity in the property, the scammer may eventually get the homeowner to take a low sum of money for the home. They have them enter into a lease agreement for awhile, and then later evict them. The homeowner loses their home and its equity.
HOA Lien Scheme
In the HOA lien scheme, the scammer will purchase an HOA lien that is against the homeowner’s property. This lien may arise if the homeowner is not paying their HOA dues and assessments. The division has also become aware of scammers creating and recording fraudulent HOA liens against properties. They use those liens to entice the homeowner to pay off the liens directly to them. Or they transfer the title to their property with a promise to help them out of their financial difficulties. This can occur on properties where in reality no HOA exists or where the HOA is dormant. This can even occur with someone posing as an HOA official or the HOA’s manager and sending out bills and liens in the dormant HOA name or newly created fake HOA name.
Don’t Be Fooled By Scammers
Typically in these instances, the title transfers from the homeowner to the scammer by way of a quitclaim deed that is never recorded. It may also be recorded to either a fictitious, alias, or shell company or trust that was established to perpetuate the ruse. The recording of a fraudulent lien can go undetected for a long period of time until someone performs a title review on the property.
These situations can leave a homeowner losing their property, becoming a renter in their own home. Their credit rating is severely damaged, and there is a possibility that the lender may pursue a deficiency judgment against them. Please research any suspicious inquiries.
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