Mortgage Scams are Still With Us
If you thought the days of mortgage fraud were behind us, you may be surprised to learn that the Federal Bureau of Investigation reports that mortgage fraud has continued to rise and this year it will rise about 300% with known and tracked cases. This is only what the FBI apparently knows about, so you can imagine there are cases that have never reached their radar.
In addition to fraud when home buyers are going after a mortgage for a home, the fraud is reaching to home owners on the verge of losing a home, desperate to try anything to save it.
If you are a buyer looking for a loan, or a homeowner looking to refinance, it is important to be sure the lenders you work with are reputable. Much of the loan fraud comes from strangers, unsolicited contacts, Internet lenders and high-pressure loan salespeople. Avoid e-mail spam offers and Internet-based ads that promote eliminating existing mortgage loans for an up-front fee they ask for to “prepare documents” to satisfy the debt. Many of these scams offer interest rates far lower than anything a reputable firm is offering; of course the problem is they are a scam. Also beware of offers saying they can “save” you from defaulting on loan payments, or from foreclosure. In one known scheme the lender asks the home owner to make their payments to a “trust account” which they say they will hold for the home owner. Of course this money is never given to the home owner’s mortgage company and the home owner ends up further in debt. Other scammers ask the person applying for a loan to put false information on their applications in order to qualify for a loan, or even might ask the borrower to sign blank loan documents which the lender later will fill in.
Basically follow the rule, if it sounds too good to be true, then it most likely is not true – but instead it is a scam.
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