Beware: “Homeowner Benefit Agreement”
As the real estate market cools, it’s no surprise to see predatory practices on the rise. One scam making news is something called a “Homeowner Benefit Agreement” or “HBA” that promises homeowners quick cash of up to $5,000.
The problem is that the homeowner doesn’t find out what they are giving up for that easy money until it’s too late.
As investigative reporting from WBZ reveals, homeowners were shocked to discover that for a few thousand dollars cash, they signed a legal agreement with the HBA to list their company with them if they sell their home anytime in the next 40 years!
And it gets worse: Along with the HBA, these homeowners signed a simple mortgage which was recorded at the county Registry of Deeds, creating a lien on the property.
What this means: The HBA mortgage lien is a speed bump on the homeowner’s road to refinance or sell the property. That lien must be released if the homeowner wants to refinance or sell. And if the homeowner chooses to list their home with a different real estate agent, the homeowner could be liable to the HBA company for breach of contract.
The homeowners in WBZ’s investigation stated the HBA company did not clearly explain the terms of the deal, including the fact that the agreement created a lien on their homes.
Pro Tips: If you’re looking for cash from your property, think twice about promises of easy money from “innovative” financial firms. Check with a licensed attorney first before you sign anything.
Questions? Contact our office at 781-784-2500.