The economy is lousy and everyone knows it – including the bad guys. Likely the most sordid recessionary scam making the rounds is called “equity stripping.” Equity stripping comes in a wide range of colors, but it generally goes like this: Party A finds themselves in a precarious situation due to health or unemployment where their income doesn’t cover their mortgage, which, due to the current real estate environment, is now worth more than their home. Party B is aware of the situation, and sends them an email saying he will effectively bail out Party A by buying their house, making the mortgage payments, and leasing it back to them on a buy-back plan. But Party B is no angel. Either through onerous terms or old-fashioned pressure and deception, he works his victims into a situation where they’re simply unable to comply with his ever-changing rules. Ultimately, Party A is left with no alternative but to kiss off the home they worked so hard to maintain.
Yet home debt is just one of the many economic problems facing Americans today. Another is bad credit. And here, the possibilities are endless. You may be approached by someone claiming they have an “in” with the credit bureau and for a small fee can clean up your problems. Or that they can fix your record by getting you a new taxpayer identification number. In the end, the chances that anyone can do anything that would affect immediate change are incredibly low.
How to avoid:
• Not everyone who appears to offer a solution to personal financial and home ownership problems is a thief. However, the vast majority of reputable companies will not approach you – especially via an unsolicited email. If you receive anything from an unknown source promising credit repair, home bailouts, and the like, feel free to research that company with the local Better Business Bureau, but prepare yourself fully for hitting the Delete key.
• Ask yourself a very important question: What’s stopping you from rescuing yourself from a bad situation? There are no magic bullets out there, but there are ways to help re-allocate debt load or make an impact on credit card debt. And certainly nobody knows your own situation as well as you. Check with trustworthy groups such as American Association of Debt Management Organizations (http://www.aadmo.org/) Association of Independent Consumer Credit Counseling Agencies (http://www.aiccca.org/), and National Foundation for Credit Counseling (http://www.nfcc.org/about/index.cfm) for more information.