Don’t Fall for It! Common Mortgage Scams

It’s been getting harder and harder to make your mortgage payment every month. So if someone came to you with a quick solution, it might sound pretty tempting, right? If something sounds too good to be true, it probably is.

We've talked a little about common VA loan scams, but homeowners using more common mortgage types need to be aware of scams, too. Because if you’re not careful, you’ll end up in even worse trouble than you are right now.

Watch out for scams like these. 

Buy Back Schemes

The scammer comes to you with a win-win solution. You sign your title over to them and they’ll pay your mortgage. You still get to live in your house. But now instead of paying your mortgage, you’ll pay rent to the scammer. And once you get back on your feet you’ll still have the option to buy your house back. The only problem is, the scammer isn’t paying your mortgage. Now that they own your house, they can either evict you or just collect your rent until your lender forecloses on the house.

Bait and Switch

Scammers might promise that they can lower your monthly payments. No questions asked. No money upfront. All you have to do is sign a couple of papers. Be careful what you’re signing. In this scam, there’s usually a title in that stack of mortgage papers. By the time you’ve signed them all, you’ve also signed your house over to the scammer.  

Your Mortgage has (not) Been Sold!

It’s not unheard of for your mortgage to be sold to another lending company. So when you get a letter in the mail saying you should start sending your payments to a new address it’s no big deal, right? If you get a letter like that, always confirm it with your lender. It could be a scam. And the worst part? You think you’re still making your payments, so you won’t even know you’ve been scammed until your real lender tells you that you’re in default.

Phantom Promises

 A scammer will set up a fake company that promises to get your monthly payments lowered, get you a better interest rate, or find another way to help you avoid foreclosure. All you have to do is give them a fee up front and you’ll have a money-back guarantee. These scammers will pocket your upfront fee and never deliver on their promises. Before you get scammed, remember, you never have to pay upfront for a loan modification.

If you’re facing foreclosure, there are resources out there to help you. Contact your lender right away and learn more about the Home Affordable Modification Program (HAMP).