Scammers often claim to be lenders, loan servicers, financial counselors, mortgage consultants, loan brokers or representatives of government agencies who can help people with their mortgages. These criminals prey on homeowners who are in vulnerable or desperate situations, for example, at risk of losing their home because of missed payments. At this point, many people will jump at the most promising offer, even if it seems too good to be true. Don’t let yourself be fooled by recognizing these common features of a mortgage scam.
1. You must pay a fee to be “guaranteed” a foreclosure rescue or loan modification. No matter the situation, always be wary of upfront fees, because chances are you will never see that money again or get the promised services. Also, question the service provider’s power to accomplish a “guaranteed” service.
2. The company claims that it is approved by or affiliated with the government. Scammers try to up their credibility by connecting themselves to official or trustworthy institutions, for example the federal government. Never consider these types of claims as true right away. Do research and contact the government or your loan servicer.
3. You receive an unsolicited request to divulge personal financial information. Many people think that as long as they do not provide their Social Security number they won’t be victimized. However, scammers can commit fraud or theft using information such as your birth date, loan balance, loan number or other account information. In general, never release personal information in response to an unsolicited request or message.
4. You are pressured to sign over the title to your home or approve documents that you haven’t had time to read. Phrases like “act fast” or “limited time offer” are immediate red flags indicating a scam. Scammers hope that with time pressure their targets are more likely to make costly or careless mistakes. Do not trust or sign documents from third parties without consulting your lender or a trained professional at a reputable counseling agency.
5. You are told to stop paying your mortgage lender and start paying your new “helpers.” You might be tempted to stop paying your lender, but doing so will only make matters worse, especially if you are in a tight situation. This will do further damage to your credit and the money you hand over to a third party will likely disappear.
Always be critical of greats deals even if you are in desperate need of one. Most often than not, these offers are the work of money-hungry criminals. Protect yourself by remembering these common red flags. If you suspect that you have been targeted by a mortgage scammer, you can protect yourself and your community by reporting it to the appropriate authorities.