Mortgage Scams
By guest blogger Dawn Hunter
Securing a mortgage is one of the largest financial decisions we will ever make.
Whether buying or refinancing a mortgage, there is a lot that is misunderstood about loans. Unfortunately, their complexity creates an opportunity for criminals to exploit borrowers.
Let’s delve into the most common types of mortgage scams and the 🚩 Red Flags that may help you identify them.
Common Mortgage Scams
🎣 📧 Internet and Email Phishing:
Scammers use falsely branded emails and websites to collect personal information from homeowners leading to identity theft and financial loss.
🚩 Red Flags: Unsolicited emails asking for personal information with suspicious links or attachments, requests for login credentials.
📑Title Fraud:
Fraudsters steal homeowners’ identity to transfer the property deed into their name, and in some cases, even take out new loans against the property. (I have witnessed this happening.)
🚩 Red Flags: Unfamiliar names on property documents, missing mortgage statements, unexpected notices from lenders.
🚫🏚️ Foreclosure Rescue Scams:
Scammers promise to rescue homeowners from foreclosure by negotiating with their lenders. Although they require an upfront fee, they do nothing to help you, and sometimes even convince the homeowners to transfer the deed of their home to the company.
🚩 Red Flags: Requests for upfront fees, pressure to transfer the property deed and guarantees of stopping a foreclosure.
🏦 🔁 🏦 Loan Flipping:
Predatory Lenders persuade homeowners to repeatedly refinance their mortgage, each time charging higher fees and points.
🚩 Red Flags: If you are offered a refinance with little to no financial benefit after the high fees are implemented.
🧾 👀 Deceptive or Misleading Solicitation:
This is often a piece of snail mail that is designed to look official and mimics the branding, logos and format of the borrower’s current lender. The letters typically contain misleading information and present new offers or refinancing options from your existing lender, but are actually from a new company.
🚩 Red Flags: Mail may include phrases like “Important Information About Your Mortgage,” or “Urgent Notice.” (This is the one I see my clients getting daily.)
How to Avoid Being Scammed
Mortgage scams can range from seemingly harmless offers of assistance to sophisticated schemes designed to strip away a borrower’s financial security and even their home. However, when it comes to all mortgage scams, the ways to detect and avoid them are:
- Make it a habit to open and read all your mortgage statements completely. Also, don’t throw them away – shred them.
- Look for disclaimers which are often in fine print at the very bottom of the page.
- Be wary of any communication that uses high-pressure tactics, such as urgency or limited-time offers.
- Verify the source. Check the sender’s information. Official communication will come from their lender’s verified contact details.
Quick tip to avoid annoying solicitations from other lenders:
Once you submit your application, your credit will be pulled. The three credit bureaus then sell your information to online lenders who will attempt to solicit your business, and you will begin to receive multiple offers via email, snail mail, and phone. If you’d like to avoid this, before your loan information is submitted, visit www.donotcall.gov and add your information to the Do Not Call List, which will keep legitimate companies from inundating you with junk mail and calls. Click the link in this sentence for more options to keep your information from being resold to mortgage marketers.
Finally, if you still aren’t sure about an offer you’ve received, reach out to a verified and experienced mortgage lender to check its validity. I offer this service to my clients, and I welcome anyone reading this to call or email me if they are unsure of an offer they’ve received. I am more than happy to keep the scammers from victimizing another person.
Dawn Hunter,
Mortgage Loan Originator
Summit Home Lending
360-271-1762
Dawn Hunter is a seasoned Mortgage Loan Originator specializing in traditional and reverse mortgages with 19 years of expertise. She is based out of Poulsbo, WA and is licensed in 19 states, including Washington.
Dawn is passionate about educating and empowering her clients to make informed decisions that help improve their lives. In her free time, she enjoys gardening, camping, and spending time with her family. Dan can be reached at dawn@summitlendingusa.com.
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