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Don’t Be A Victim Of Real Estate Scams

The real estate crisis has affected many homeowners in the last few years but it has also opened the doors for scammers to take advantage of those who are most vulnerable. The FBI  has reported that mortgage and real estate scams are on the rise. In face, their reports estimate that between  $4 billion to $6 billion in annual losses result from mortgage fraud. These scams not only affect the victim but can also result in a spike in foreclosures,  lenders raising their rates and fees to recover losses and can lower home values.

Unfortunately these scammers are always finding new ways to defraud and these crimes are often complex, involving several parties and occurring over multiple transactions. Anyone can fall victim to a scam so pay attention to detail and stay vigilant. Educate yourself about mortgage fraud and be on guard for any warning signs in a transaction. 

Below are some of the most common scams that have been reported.  Be aware and stay on top to of anything that appears suspicious. Remember the saying “if it seems too good to be true, it probably is!”

Scam #1:In this scam, so called “Rescuers” prey on homeowners on the edge of foreclosure by promising that they can save it. They persuade homeowners to pay for different fees and fill out fake forms and other tricks. In the end the homeowner still looses their home to foreclosure anyway. These scammers prey on desperate homeowners who will do anything to save their home. 

Beware of foreclosure rescue programs where you are asked to sign over the title of your home to a third party, are asked to not contact their lender, or send mortgage payments to a third party. These are all big red flags to be aware of. 

Scam #2: This scam is when a borrower provides fraudulent financial information like income and assets so they can qualify for a loan with lower rates and more favorable terms. Lenders show suspicion when red flags such as PO boxes are listed as the employers address or if the applicant has no credit history. These type of scams eventually cost everyone as the costs and losses involved from the borrowers are passed to consumers.

Scam #3:This scam is called Appraisal Fraud, this happens when an appraisal is faulty, when it states that a property is worth more than what it really is. Typically when an appraisal is listed as higher than it actually is generates false equity because a fraudulent appraisal document has been obtained indicating the higher value. Beware of appraisals that are dated prior to the sales contract as well as other red flags such as if the owner is not listed on the contract or title.

Mortgage and real estate scams are on the rise and new schemes are being exposed every day. Stay vigilant and always ask questions. There are many excellent websites available that have alerts for consumers and useful information to help consumers stay aware.

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