My house is in foreclosure and a company is offering to put the house in a Family Trust to save it. Is this possible?
No! ?Companies offering the service of delaying foreclosure are most likely violating several recent Federal laws. If they charge an up-front fee, this may also be a felony. Stay away from these folks.
There are lots of companies and individuals that will assist borrowers to defraud their lenders by filing bad-faith bankruptcies designed only to delay a foreclosure sale. This is typically accomplished by transferring a partial interest to a person or entity already in bankruptcy, and games like that.
Similarly, a living trust does not protect the trust beneficiaries from loss of the property. ?After the foreclosure sale, the real property will be sold and gone. The trust will no longer own it. The occupants of the property, if any, are subject to eviction by the new owner. The trust’s, or the trustor’s, other assets are subject to suit by sold-out junior lienholders and possibly subject to a claim for a deficiency (sale proceeds less than amount owed).
A “living trust” is a standard-definition revocable trust where the trustor (settlor) is also the trustee during his/her/their lifetime(s), and the trust becomes irrevocable and under the trusteeship of one or more of the heirs after the death of the trustor(s). Even an irrevocable trust would generally not be creditor-proof against, say, the lender on a mortgage; the lender could either foreclose because the obligation being foreclosed was prior to the transfer to the trust, or could attack the transfer to the trust as fraudulent.
A ?rescuer? charges extremely high fees for phone work or paperwork that you, the borrower, could easily do yourself. None of the ?rescuer?s? efforts save the home. This scam gives you a false sense of hope, preventing you from seeking qualified help. ?Phone Counseling Agencies will charge a fee for services you can do yourself for free. For a list of qualified housing counselors, http://www.hud.gov/local/ok/homeownership/foreclosure.cfm.
Homeowners have alternatives to foreclosure that they can pursue if they have enough time. ?Thus, it is critical to legally stop the foreclosure process as soon as possible in order to have a better chance of recovering from the foreclosure.