The HELOC scam is a bigger threat during COVID-19 pandemic
The seller walked away with nearly $90,000, and the buyer was left holding the bag.
One of the most common types of claims we’ve paid out is due to the HELOC scam. With pandemic delaying government services, now is an especially vulnerable time.
We once had a buyer receive a notice of foreclosure a few months after closing due to failure to pay the lender of a home equity line of credit.
Turns out the seller had taken out the HELOC weeks prior to closing but didn’t disclose the lien, recognizing public records can be 2 to 3 months behind in indexing liens. Our title examiner had no way to catch it.
The seller walked away with nearly $90,000, and the buyer was left holding the bag. Thankfully the buyer purchased the #ownerspolicy. We’ve paid out over $280,000 to buyers in this situation.