“Deed the house to me and pay me rent. I'll pay the mortgage, and sell it back to you.”
It's the kindest-sounding pitch in the whole foreclosure scam playbook. Nobody is taking your house. You get to stay. You'll buy it back "when you're on your feet."
That's exactly why it works. And exactly why you need to read this before you sign anything.
The script has barely changed in twenty years. Legal Aid lawyers in New York wrote it down word for word:
"Deed the house to me and pay me rent. I'll pay the mortgage, and sell it back to you."
The modern ad version, as the FTC described it: offers to "unlock" the equity in your home by selling it and renting it back. The FTC's warning is blunt — the ads "make these agreements — called sale-leasebacks — sound like a simple and risk-free way to get cash upfront and stay in your home." The hidden parts: "hefty fees, exorbitant rent, and even eviction... if you can't afford to pay the rent when it goes up. (And it often does.)"
Some pitches add a sweetener: they'll help you "repair your credit" too. That second hook shows up in case after case.
Step one: they find you. Foreclosure filings are public, and these operators read the lists. (Our master guide explains why your name is on one.)
Step two: the deal. You sign your deed over. You stay in the house as a tenant. They promise you can buy it back later.
Step three is where it splits in two:
In the criminal version, your house often doesn't even go to the "rescuer." It goes to a stranger with good credit — a "straw buyer" — sometimes without you ever knowing. They take out the biggest mortgage the house will carry. Your equity gets paid out at closing — to them, not you.
Then they collect your rent and never pay the new mortgage. The loan defaults. The bank forecloses. You're evicted from a home you used to own, with no equity and wrecked credit.
The buy-back? Where it exists on paper at all, the price or the conditions are built so you can never actually do it. The eviction was the plan from day one.
There's also a legal-but-risky version. Real, regulated companies sell sale-leasebacks as a way to get cash when you can't qualify for a loan. Same mechanics — sell, rent, maybe buy back. It's not automatically a scam.
But regulators in several states accused the biggest player, a company called EasyKnock, of deceptive marketing. Homeowners got a fraction of their home's value after fees. Rents climbed. People almost never managed to buy back. EasyKnock shut down in December 2024 while a U.S. Senate probe was underway. Legal doesn't mean safe.
Charles Head ran a nationwide foreclosure-rescue leaseback ring out of California in the mid-2000s. The pitch to struggling homeowners: we'll save your house from foreclosure and repair your credit. You stay home. You pay us rent.
Behind the curtain, prosecutors proved, Head's crew used "misrepresentations, fraud and forgery" to swap straw buyers onto the titles of victims' homes — without the homeowners' knowledge. Then they pulled the maximum cash out of each house with new mortgages.
The numbers: roughly $90 million in fraudulent loans, more than $50 million in losses, and titles to more than 300 homes. The homeowners lost everything — house, equity, credit.
Charles Head got 35 years in federal prison. His brother Jeremy got 10. More than 17 defendants went down in all.
The sentence didn't kill the pitch. People are still hearing it today.
If you want to stay in your home, the free path starts with one phone call: a HUD-approved housing counselor at 888-995-HOPE (4673). They review your situation for free and they work for you, not an investor.
Then call your servicer's loss mitigation department. A federal rule — 12 CFR §1024.41 — can pause your foreclosure when you file a complete application for help more than 37 days before the sale. That's a real stay-in-your-home tool, and it costs nothing.
If selling truly is the right move, sell on the open market with your own agent and your own attorney — and walk away with your equity in your pocket, not theirs. See our guide on lowball cash buyers before you take any off-market offer.
Colorado: Anyone buying a home in foreclosure with a rent-back or buy-back deal is an "equity purchaser" under the Colorado Foreclosure Protection Act. You can cancel until midnight of the 3rd business day after signing (or noon the day before the sale, whichever comes first). And a buy-back price more than 25% above what they paid you is presumed unfair under Colorado law — the buyer can try to argue otherwise, but the burden is on them. Colorado Foreclosure Hotline: 1-877-601-HOPE (4673).
California: The Home Equity Sales Contract Act gives you a 5-business-day cancellation right, and courts can undo unconscionable deals for up to 2 years. The buyer can't take your title or pay you during the cooling-off period.
Florida: State law says the buy-back price in a foreclosure-rescue deal can't be unconscionable, requires written disclosure of all repurchase terms, and gives you a 30-day right to cure if you fall behind on the deal — violations can cost the operator up to $15,000 each.
Nevada: Foreclosure consultants must be state-licensed, and a consultant is barred from acquiring any interest in the home of a homeowner they contracted with.
This guide is educational information, not legal advice. For advice about your specific case, talk to a HUD-approved housing counselor (free) or a licensed attorney.
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