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Will a Land Trust Stop My Property From Getting Foreclosed On?

Written by Steve Rhode

“Dear Steve,

I’m falling behind on my mortgages (2 mortgages) since I can’t rent out my rental property for 7 months.

My income is not much to keep me upfloat and since there other expenses plus the devastating property taxes I’m really falling behind and having a hard time.

The property where I live was refer to foreclosure dept. but no sale date yet. (Please don’t, 9 of us will be displaced) I started making my attemp to modify since they are asking $18,062.00 to reinstate it.

My dilemma is everytime I called CSR has different style of gathering information and I have to hang up and get the information they needed.

This makes me confuse how to really proceed with this. I’m trying my best and sometimes thinks of looking for a modification lawyer who knows how to do the step by step process. Please help me I don’t want to loose another property in foreclosure.

Will a Land Trust save my property form being foreclose? How safe is this?

My friend highly recommend this for she lost a house in foreclosure already and put her other property into it and said her property is in Land Trust for 2 years already. She pays monthly fee of $500.00, plus the initial fee of $ 3,000.00”

money down the drain

Land trusts as a foreclosure trick have been highly discredited. A very prominent case filed by the Florida Attorney General against one such company has shown that the theory is built on quicksand. See this series of stories.

The attorney general’s complaint said the land trusts wrongfully guaranteed they could cancel the homeowner’s mortgage, misrepresented that homeowners can void their mortgage through a quiet title action, and charged an advance fee. – Source

If your friend that did this lives in Florida she might already be listed as a victim in this scam.

The underlying problem here is that while the consumer signs the property over to the land trust, the underlying mortgage still exists and the consumer is on the hook for that. Some people are now suing the land trusts to try to get the title to their property back. Because now the consumer is still responsible for the mortgage and paying a monthly fee on top of that to the land trust mortgage rescue company.

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And there is of course the problem that any advance fee paid for foreclosure avoidance is illegal under the Mortgage Assistance Relief Services Rule by the Federal Trade Commission.

Maybe the reality of the situation is you simply can’t afford to remain in the property at this time?

If you can afford the regular mortgage payment plus a bit extra to get caught up on your mortgage, you might want to talk to a local bankruptcy attorney about a chapter 13 bankruptcy to prevent the sale.

If you are hoping to pay for some magical process to stop the eventual loss of your home you can’t afford, prepare to be scammed.

But if you want to know if there is even a mortgage modification program that your lender participates in that might be appropriate, contact a free HUD Housing Counselor and they can walk you through the process.

Please post your responses and follow-up messages to me on this in the comments section below.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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