Getting a mortgage can be a long process. Many people encounter road blocks along the way due to the income, credit and other requirements. While there are many organizations and regulations out there dedicated to helping home buyers and owners, there are also some mortgage scams to beware of. However, thankfully, there is a lot of info out there on mortgage scams to help you educate and protect yourself. This article will provide examples of some common scams and provide tips on how to avoid them.
Fake Modification or Refinancing
This scam is especially sneaky and destructive. Criminals, often posing as bank officials or attorneys, visit a house with a mortgage on it. They try to get the homeowner to sign a stack of papers. Hidden in the stack of papers is a deed that transfers ownership of the house to scammers. While most homeowners would spot this, some homeowners, especially those that are not fluent in English, would have difficulty realizing the fraud.
Upfront Fees for Loan Modification
Legitimate loan modifications do not require upfront fees. Some homeowners are not aware of this, and pay thousands of dollars in these illegal fees because they think it is common practice. Scammers sometimes claim the fees are for document preparation or similar actions, but keep in mind that a legitimate loan modification professional will not charge you any upfront fees.
Fake Banks Taking Payments
Banks often buy and sell the mortgages they own. This common practice has lead to a scam where fraudsters claim to be the new owners of your mortgage, and demand that you send your payments to them. Verify any sale with the bank that previously held your mortgage. This will allow you to avoid this scam.
Tips for Avoiding Mortgage Scams
There are some best practices that’ll allow you to avoid most mortgage scams, even the new ones that have not yet come to light. First, always do your research when applying for or modifying a mortgage. Education from verified resources will help you prepare and avoid mistakes. Additionally, make sure to find a trustworthy lender willing to work with you, answer your questions, and that you trust to help you make important financial decisions. Finally, educate yourself about common scams and financial road blocks to avoid mortgage issues.
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