Triangle Area Fraud Alert

Triangle Area Fraud Alert! Beware Homeowner Benefit Agreements!

Recently My NC Homes was made aware by one of our preferred real estate attorney's and a local Register of Deeds of a worrying practice occurring in North Carolina. We would like to warn our clients, prospective clients, and the public of this practice before they are impacted. Here is what to know about Homeowner Benefit Agreements and what they really mean.

What are Homeowner Benefit Agreements?

As inflation impacts many homeowners there are those who need extra cash and who fall prey to predatory lenders and or real estate firms/brokers offering them quick cash with out any loan documents. A Homeowner Benefit Agreement binds the signer who owns a property to a certain agency/lender for a term of 40 years. The property owner will be bound to rates in the contract for the term and the agreement runs with the land and binds future interests in the property to this agency. The Register of Deeds who bought this to our attention reports receiving 12 of these binding documents since June 2022. A quick check in Durham and Wake counties shows another 250+ such liens filed by one real estate firm alone. 

How do I Know if I am Being Targeted?

Agencies will make offers to a property owner in cash to sign this type of agreement. With interest rates climbing, this type of offer may seem attractive, especially with a fast cash incentive, however anytime you are presented with documents giving rights or creating obligations on a property, you would be well advised to have an attorney review it and explain to you in detail what you're agreeing to.

Who Offers a Homeowner Benefit Agreement? 

Realtors, unscrupulous private lenders or brokerages may offer quick cash to list your home. They may not be telling the full story that the agreement gives them an interest in the home and property for a certain term. 40 years is a very long time and your successors would be held to this agreement as well. Anytime you are approached by someone offering quick cash and a contract, be very wary. As we've all heard many times before, "If it sounds to good to be true; it probably is." Currently the NC State Attorney General's office is looking investigating certain real estate firms that are filing these agreements for predatory lending. Just as with payday loans, these Homeowner Benefit Agreements target those least able to afford it or the poor and elderly.

My NC Homes understands that there is much uncertainty in the market and signing away rights to your home for quick cash may be appealing, but do due diligence and consult an attorney. If you require assistance selling your home, we are able to strategize the best course of action, in your best interest. Contact My NC Homes today.

My NC Homes

1980 Great Ridge Pkwy Chapel Hill, NC 27516
Phone: 919-451-7868

Posted by Larry Tollen on

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