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Predatory Home Buying through Contract-for-Deed Details

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Predatory home buying is the process where a real estate buyer dupes a lending institution into giving him or her money for a home. What this means to the borrower is that the borrower purchases a home at an amount higher than the market value. This is usually accomplished by the use of deception or the ignorance of the lending institution about what it is that they are agreeing to.
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This is why lenders now have a process in place that helps them prevent foreclosure by holding fraudulent agreements. These agreements are called “contingency agreements.”

One of these agreements is a contractual assignment of interest in a property to a named third party. In other words, if you are a mortgage lender and you are told by a contract-for-deed that your loan is going to be taken over by a third party, then that third party has all the rights and obligations of the loan. However, you can stop foreclosure proceedings by taking your property back under a deed in lieu of foreclosure. This means that the lender doesn’t have the right to take your house through foreclosure. The deed in lieu stops foreclosure. If you are in foreclosure and you are handing over your property to a third party, then the bank can sue you to recoup its losses from the assignment of interest and principal.

A contingency agreement gives the lender a legal loophole for continuing the foreclosure even after the property is transferred under a deed in lieu. The bank can file a lawsuit against you to recoup its losses and keep you away from your home. The threat of a lawsuit often scaring borrowers off so that they will agree to pay whatever amount the lender demands under the contract-for-deed. If you ever get behind on your loan, then you should consult with a foreclosure attorney who can provide you with more advice.

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