Predatory lenders are now targeting those with subprime mortgages to offer them what is being called a rescue loan. The lender looks for those who have some equity built up in their homes, but are now having difficulty making those high monthly mortgage payments.
The scam is horrible. The homeowner gets behind in mortgage payments and the predatory lender offers a loan to help the homeowner catch up with the payments. In exchange, all the lender wants is for the homeowner to sign title over to the lender. The lender promises that the homeowner will be allowed to stay in the home and pay rent to the lender until that loan is paid back.
This is not a loan. Instead, it is a buy-out and a leaseback. The homeowner has sold his or her home to a lender for a tiny amount of what the home is worth and is now leasing it back on a month-to-month basis. The lender eventually sells the home and evicts the former homeowner who loses everything.