Home Loan Safety Tips to Avoid the Scams
DId you know the official site of the Department of Housing and Urban Development has an entire page dedicated to warning people about a type of home loan scam known as the loan modification scam?
This is a con game that involves offering a non-existent home loan modification plan to a homeowner who may be in trouble with their mortgages. In these scams, the homeowner may be asked to pay up front for services that legally require completion of those services before billing can begin.
One of the key aspects of this type of scam involves offering something that sounds too good to be true--and IS too good to be true since it cannot be done. If you are offered a guarantee that foreclosure can be stopped, or tell you to STOP making mortgage payments, you are dealing with a scammer and you should definitely NOT proceed.
In ANY mortgage loan transaction there are areas where scammers operate that are outside the traditional practices of the mortgage industry.
Any third party that tells you “let US pay your mortgage on your behalf” should not be trusted, nor should THAT be confused with legitimate escrow accounts which mortgage lenders often use legally and for their intended purposes.
Don’t give in to high-pressure sales tactics urging you to sign now, sign before reading, sign before fully understanding what you have read, or urging you NOT to wait to show your legally binding contract to a lawyer.
There are many different types of mortgage fraud, mortgage scams, and con games involving real estate. They can include:
- Phony counseling
- “Foreclosure rescue” programs
- Scammer operated “government loan modification” that do not link to .gov sources or official contacts in the U.S. government
- Forensic loan audit
- Rent-to-own scams
- Leaseback scams
- Short sale scam
- Filing bankruptcy to prevent foreclosure
Remember, scammers use many legitimate-sounding descriptions in their work to part you from your money. They will use slight variations of typical lending industry practices. Yes, your legitimate FHA lender WILL require your Social Security Number and other data covered by the Privacy Act. But how you are asked for this data and when is key.
A legitimate bank will have an official site, a working telephone number you can call, and multiple departments. A scammer may ask you to submit information to gmail accounts rather than an email associated with the lender’s official site, the scammer may ask you to complete application data over the telephone, or ask you to visit an unfamiliar website with a web address that does not match that of a legitimate lender.
But THE MOST IMPORTANT aspect of scammers to avoid--the EASIEST way to avoid getting scammed?
Do NOT respond to companies reaching out to you via email, phone, or online. If you did not initiate the contact, do not respond to it. It really can be that simple. Not always, but this is a tactic that actually works.
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