Equity stripping, also known as equity skimming, is a type of foreclosure rescue scheme.

Often
considered a form of predatory lending, equity stripping became increasingly widespread in the early
2000s. In an equity stripping scheme an investor buys the property from a homeowner
facing foreclosure and agrees to lease the home to the homeowner who may remain in the home as
a tenant. Often, these transactions take advantage of uninformed, low-income homeowners;
because of the complexity of the transaction, victims are often unaware that they are giving away
their property and equity.[citation needed] Several states have taken steps to confront the more unscrupulous
practices of equity stripping. Although "foreclosure re-conveyance" schemes can be beneficial and
ethically conducted in some circumstances, many times the practice relies on fraud and egregious or
unmeetable terms.[1]