About Land Grants to Stop Foreclosure

Homeowners must know that a land grant to stop foreclosure is illegal. Any company that makes such a promise is fraudulent. Explore a fraud that grew out of a housing boom gone wrong.

Misconceptions

Government grants exist for many things; however, land grants to stop foreclosure isn't one of them. Land grants were once a legal practice. Today, they are used to lure homeowners into signing over the deed to the home. Despite the fraudulent aspect of the transaction, homeowners are still susceptible to foreclosure--the crime committed doesn't stop the process. In addition, the homeowner may not realize that they were a victim of fraud until the sheriff's notice is tacked to the door. At that point, little can be done to stop the foreclosure. Again, being a victim of fraud does nothing to stop the foreclosure.

History

Land grants were used in the 1800s to lure settlers out west. The incentive worked and the practice was discontinued by the end of the 19th century. Fraud artists have resurrected the land grant program as a new way to illegally obtain a deed. It began in the millennium's housing boom, which busted in 2007. As homeowners became desperate for solutions to keep their homes, fraudulent companies arose to take advantage of the unfortunate. These once legal transactions are no longer recognized by state, local or federal government. The Federal Bureau of Investigation (FBI) actively investigates land grant scams.

Features

Fraudulent companies acquire a deed to the home one of two ways. In the first scam, the homeowner signs the property over to the company using a quit claim. The new company now owns the property, which it promises to deed back to the homeowner after a short period. Instead, the fraudulent company sells the home at a bargain price. Meanwhile, the original mortgage is still owed and the original homeowner still liable; however, the home now belongs to someone else. In the second scam, the company promises to speak to the lender and reverse the foreclosure. The homeowner then pays a substantial fee and monthly "mortgage" payment to the scamming company who is supposedly paying the lender. In reality, no one is paid but the frauds, and the house is foreclosed on because the debt is still owed to the lender.

Effects

No matter how the land grants are packaged, the homeowner always ends up out of a home, but responsible for the debt. Because the law doesn't recognize the land grants, the only recourse that the homeowner has is to sue the fraudulent company. The problem is that the company is often very hard to find and once found, difficult to prosecute or bring civil action against.

Identification

You can spot a land grant scam immediately if the term "land grant" is used. Companies will also try to convince homeowners to sign away the home or pay a third party to negotiate with the lenders. Both of these actions are key components of a land grant to stop foreclosure scam.