Division of Real Estate Warns Homeowners About ‘Equity Skimming’ Schemes

By now, we should all be wary of people offering to “help” us financially, usually via the internet or email, but also by phone.  As the saying goes, “If it sounds too good to be true, it probably is.”

Last week the Colorado Division of Real Estate (DRE) issued a warning about scammers cheating homeowners out of their home’s equity on the pretext of helping them pay HOA liens on their home.

Yes, an HOA can place a lien on your home for failing to pay your HOA assessments or fines, and an HOA lien takes priority even over the lien of your mortgage lender.

It is possible for an HOA to foreclose on your $600,000 home because of unpaid dues or fines, no matter how small. But if you can’t pay, what do you do? Those liens and subsequent foreclosure actions become public records, making you an easy-to-find target for a scammer wanting to “help” you.

Here’s a link to the full DRE warning. It describes several scamming scenarios. According to the DRE’s warning, those scenarios “can leave a homeowner losing their property, becoming a renter in their own home, having their credit rating severely damaged, and having the possibility that the lender may pursue a deficiency judgment against them if the property is foreclosed upon, as well as the HOA pursuing a personal judgment against them for unpaid HOA dues.”

Homeowners are urged to look for the following red flags:

>  Anyone wanting you to act fast with a quick-fix to your financial difficulties.

>  Promises to resolve your financial problems and to leave your cares behind.

>  Someone wanting you to transfer your ownership in the property to them.

>  Anyone asking you to sign a power of attorney for them to act on your behalf.

> Proposing that you’ll be a tenant in the home that you now own.

>  Someone telling you that there is no need to consult with an attorney, accountant, real estate broker, lender or anyone else.

Feel free to contact me if you find yourself in this or a similar situation. My intention is not to convince you to list your home with me. I just want to give you my own layman’s feedback on what others may have told you, and I can, if appropriate, refer you to a trusted real estate attorney. First, however, read that DRE warning, which has lots of useful information and links for reporting suspected scams or getting other advice.

And, as I like to say, remember that “Google is your friend.”  When contacted by someone you suspect could be a scammer, do a web search for the person and/or company and/or email address and/or phone number. Also, we have a special app called “Forewarn,” only available to licensed Realtors like myself, where I can instantly search by name or phone number. My broker associates and I use that app to check out people who want to do business with us, instantly learning their age, properties owned, bankruptcies or liens, criminal charges, and even cars they own.  I’m happy to do such a search for you, too.

Lastly, I’d like to put in a good word for my cell carrier, T-Mobile.  My previous cell carrier was AT&T, which didn’t provide Caller ID on people not in my contact list, but I do get Caller ID with T-Mobile. If a number does not have a name associated with it, I let it go into voice-mail, and those callers rarely leave a message, suggesting, I believe, that it was a “spoofed” number by a solicitor or scammer. Thank you, T-Mobile! I’m wasting a lot less time than I used to on answering unwanted calls.

Author: Golden Real Estate, Inc.

Golden Real Estate is a prominent member of the Denver/Jefferson County real estate scene. Based in Golden, we service both Denver and Jeffco, representing both buyers and sellers. We're well known for Broker Jim Smith's weekly "Real Estate Today" column published in the Denver and Jeffco editions of the Denver Post's YourHub section each Thursday. The column also appears in several weekly newspapers and is archived at www.JimSmithColumns.com. We have nine agents, all of whom are Realtors and EcoBrokers. Our office is Net Zero Energy since December 2017, and several of us drive electrics cars. Known for our sustainable practices, we accept polystyrene (aka "Styrofoam") for recycling, keeping 200 cubic yards per year out of area landfills.

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