Mortgage scams are growing nearly as fast as identity theft is. Criminals will take advantage of anyone that they think might lead them to a little bit of money, and people desperate to save their homes fit the bill. Identity thieves and other scammers don’t care that it’s their home. What matters to them is how it can be used.
How You’re Targeted
An identity thief or other scammer usually targets people that are in similar lifestyles that they appear to be. So, a scammer might approach you, and they’ll appear to be who you are. They do this by setting up their cons in a community that’s carefully selected for the instant connection they can create with the community.
Scammers are also very intelligent and understand how mortgages work. They’ll usually find their targets by using public foreclosure lists or even by purchasing lists of delinquent borrowers. (Yes, there really are companies that collect and sell that information.) Some don’t even target that specifically, they’ll just post ads online or in the paper, distribute fliers, or even go door-to-door trying to find an unsuspecting victim.
Protecting Your Home and Your Identity
Once a scammers has you in their sights, they’re going to work to gain your trust, grab your cash, and get out before you catch on to what’s happening. Here are five ways you can protect yourself from mortgage scams:
Take your time: You should always take time to think through your conversations with anyone when it comes to mortgages and other financial dealings. Take the time that you need to be sure you understand completely what you’re agreeing to do and what the results of that agreement can be—both good and bad.
Talk to your mortgage company first: Believe it or not, the mortgage company would rather have your money than your house. They want to help you figure out some way to keep your house. But in order to do that, you have to be willing to talk to them. Many scammers will advise you not to talk to the mortgage company or anyone representing them, but that’s bad advice. The mortgage company should be the first call you make when you realize you’re in trouble and will have difficulties making your mortgage payments.
Consult a lawyer: If you’re being scammed, the last thing the scammer is going to want to do is allow you to consult legal counsel. If you get any resistance at all when you mention “having my lawyer look over these,” then you’re probably being scammed. Use a lawyer that you’re familiar with, though. Don’t take the recommendation of the person you’re working with to save your home from foreclosure.
Don’t sign anything without a cooling off period: Scammers will push you through the process of signing loan papers or agreeing to some type of settlement without giving you time to think over your options. They usually use hard-sell techniques, and they’ll try to convince you that there aren’t even hours to spare, much less the days you’ll want to review their paperwork. Take it anyway. In most cases, you’ll have a few days to seek out expert advice before you sign anything.
Don’t pay any fees up front: Too often, the scam is simply to get you to make upfront payments. All the thief is interested in is your money. Don’t pay any fees upfront. Legitimate mortgage brokers are usually paid at the time of closing, and they won’t ask for additional money on the front side of the mortgage negotiation. This is especially true for fees for services such as making phone calls and other communications with lenders.
Financially difficult times are stressful enough without adding the worries of identity theft and mortgage scams to the mix. But those crimes already exist. The best thing you can do is educate yourself now and be proactive in protecting yourself. These five tips will help. And here’s a bonus for you: The old adage holds true, “If it seems to good to be true, it probably is.”
If what you’re being offered is too good to be true, walk away. In the long run, you’ll probably find out that the golden deal you walked away from was actually a scam, just painted to gold to seem appealing.