It’s unfortunate that it ever occurs, but scammers will often target service men and women. One reoccurring con that looks to take advantage of military members is unfair mortgage lending. Often times, dishonest companies will offer false promises to bait unsuspecting barrowers into bad loans.
The way the scam usually works is companies will target members of the military or veterans via mail, email or social media, promising a great opportunity to refinance their mortgage loan. The advertisement will mention special offers or may claim to be affiliated or endorsed by sectors of government, such as the Department of Veterans Affairs.
Once contacted, these companies will “guarantee” an excellent interest rate. The important thing to remember here is that legitimate lenders will never guarantee a loan rate upfront. These companies are either using misleading advertising to attract business, or they may be an outright scam in which they charge upfront fees and then disappear. It should also be noted that the VA does not contact homeowners about mortgages.
A few other red flags to keep in mind when it comes to loan scams:
You should never for pay for the promise of a loan. For companies in the U.S. doing business by phone, it’s illegal to require payment before they deliver the loan. In Canada, all advance fee loans are illegal.
If you’re pressured to make a quick decision, this should be some cause for concern. Scammers try to force quick deals knowing that hasty decision-making is to their benefit.
For more information about how to protect yourself from loan scams, visit BBB Scam Alert.