Foreclosure Scams: Watch out!
- You should never be charged a fee to get assistance or information about the Making Home Affordable program from your lender or a HUD-approved housing counselor.
- Watch out for any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay – walk away!
- Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
- Never make your mortgage payments to anyone other than your mortgage company without their approval.
Mortgage fraud is growing more and more common. Scam artists often target homeowners fighting to meet their mortgage loan responsibilities or are anxious to sell their homes.
There is aid available when facing financial troubles or foreclosure, but make sure you are dealing with a reputable organization before getting involved. To protect your home and equity and avoid falling victim to deceitful schemes, recognize and understand the signals of mortgage fraud. Know how to report fraud to federal and state agencies so they can stop scam artists from preying on innocent future and current homeowners.
Begin by learning the motives behind mortgage fraud. They are generally categorized into 1 of 2 categories:
- Fraud for property or housing
- Fraud for profit
Fraud for housing, in general takes place when a borrower wishes to buy a piece of property they know they should not be buying. Borrowers are often helped by deceptive mortgage industry pros who submit or promote the submission of dishonest data about the borrowers job, income or assets in order to qualify for the mortgage loan.
Borrowers are often influenced to partake in this type of scam by a big desire for homeownership and the feeling that no one will see the fraudulent information. Still, banks find fraud for housing scams by thoroughly going over and verifying documents and keeping tedious records. It is a federal crime to lie in connection with the loan application and these individuals may be at risk of criminal prosecution.
Fraud for benefit schemes oftentimes include a group of people who defraud a likely homebuyer or lender. For instance, a shoddy mortgage broker can team up with a loan processor to produce a fictional credit profile, and with an appraiser to increase the property value. Additionally, "straw borrowers," who incorrectly represent themselves, may be enticed to take part through the promise of financial gain.
Fraud for gain schemes are also appealing to criminal enterprises tempted by the opportunity for grander profits, fewer dangers than those normally affiliated with violent crime, and diminished sentencing or jail time.
When facing financial difficulties which are making it challenging to pay your mortgage loan, or if you get the feeling you might be falling prey to a fraudulent scam, the optimal solution is to speak to your lender or a reputable counselor. Also, be suspicious of individuals who promise to rescue you from financial difficulty or potential foreclosure.
