Frauds Scam Unsuspecting Housing Victims

Mortgage scams are becoming increasingly common, and it's important to be aware of the warning signs to protect yourself from becoming a victim. These scams can take many forms, but they all have one thing in common: they aim to take advantage of vulnerable individuals who are seeking to purchase, lower their payments, or refinance a home.

Two recent scams have been brought to CAPECO’s attention, both of which are related to homeownership and occurred within a four-month span. These scams are particularly concerning as they target vulnerable populations. The scams involves a caller ID listing a mortgage company reaching out to homeowners and offering them a loan modification by lowering their monthly payments. With the loan modification, a barcode or QR code is provided and the homeowner is told to use that code at a service payor, like Walmart, and make the mortgage payment. The scammer checks every month with the household and provides a new code. Households are being told to take that code directly to Walmart, again to make the mortgage payment. Unfortunately, the households may not learn they are being scammed until their mortgage company reaches out to them via letter after the households are three to four months late on their original mortgage payment.
Here are some common mortgage scams that every homeowner should be aware of:

1. Bait-and-Switch: A potential borrower is baited with an enticing loan offer, like a competitive interest rate or low monthly payments. Shortly before it comes time to sign on the dotted line, the lender presents completely new—and much less favorable—home loan terms.
2. Equity Stripping or “Leaseback Scheme”: Scammers promise to rescue a homeowner from their unaffordable mortgage. Facing foreclosure, the homeowner agrees to sign the deed over to a “rescuer” in exchange for the ability to continue living in the home as a renter, while the new homeowner pays off the delinquent mortgage. Meanwhile, these rent payments go toward buying the property back, with interest.
3. Mortgage Relief Scams: Scammers target vulnerable homeowners who are in financial distress. They use a variety of methods, like equity skimming, loan modification, and rescue and relief schemes to take advantage of them. These tactics offer to pay the mortgage or save the home of a homeowner in financial distress.
4. Phony Mortgage Relief Programs: Scammers pose as mortgage relief providers and offer to help homeowners modify their loans or save their homes from foreclosure. They often ask for upfront fees and personal information, which they use to steal the homeowner’s identity.

To protect yourself from mortgage scams, it's important to do your research and be cautious when dealing with lenders or other individuals who offer to help you with your mortgage. Always verify that the lender or company you're working with is legitimate, and never provide personal or financial information unless you're sure it's safe to do so. If you think you may have been the victim of a mortgage scam, contact your local law enforcement and the Federal Trade Commission immediately.

Check out these websites that provide warning signs, tips, common loan modification scams, as well as information on how submit a complaint or report fraud:

• FDIC.gov
• Consumer Financial Protection Bureau
• FTC.gov
• AARP.org
  

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