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Four common mortgage and real estate scams

On Behalf of | Nov 7, 2019 | Real Estate Law

One of, and maybe the last thing you want to happen as a consumer or investor, is to get scammed. To get robbed of your money or private information can send your finances down a rabbit hole. Real estate and mortgage scams are also not on the top of the list of worries for those families or individuals looking to invest in their future.

The frightening reality is, these scams happen, and more often than you would think. According to data compiled by the Federal Bureau of Investigation, 11,300 people were victimized by real estate or rental fraud that resulted in over $149 million in losses.

Many people victimized by real estate scams, or any scam, are too embarrassed to file a claim so many go unreported, which leads to less investigations into suspected parties, fewer convictions and less recovered funds for the victims. If your wise to the following real estate and mortgage scams, you’ll have less of a chance of falling victim.

Escrow fraud

This scam goes as follows: You get a call, email or text from an individual claiming they are from the title company, but of course, they aren’t. The scammer sets up a website that looks very similar to the actual website of the title company. They also have email addresses or phone numbers that look similar, but just one letter or number is off, and you don’t realize that minute detail, so you wire your escrow funds and boom, you’re a victim of escrow fraud.

Loan flipping

Predatory lenders are the perpetrator here. They prey on home and business owners; baiting them into repeatedly refinancing their mortgage. Often, the owner must borrow more money each time, which ups their loan payment in addition to escalating fees and points against their mortgage. A group that often gets caught in this cycle are seniors. They are easier prey due to their memory issues. The lenders will try to convince you that there is a better loan out there or that you could use a cash-out refinance towards home renovations that will make aging easier and less stressful.

Foreclosure relief

To capitalize of this scam, the criminal will prey on homeowners who are about to fall victim to foreclosure, and instead fall victim to both, a scam and foreclosure. The scammers can gain access to public records of any home in pre-foreclosure, then they enter the picture spouting unbelievable deals that offers foreclosure relief. These “foreclosure relief” scams are coupled with sayings they their mortgage payments can be brought down for a single large, up-front fee. Some of these scam artists will also claim they are working for a government housing assistant agency.

Rental scams

This is a common tactic among scammers that victimized 5.2 million Americans in 2018. The process here, is that the scammer post pictures of properties on craigslist or other social media pages and rental sites, claiming they are the owner of the property. They will then ask for an up-front payment that *allows you to view the property or to hold it as a *deposit. There is no viewing, you should never have to provide a deposit to view a property and you just became the next victim of a real estate scam.

As mentioned above, these scams are common and happen to people in all walks of life, which is why there are attorneys that fight against real estate and mortgage scams. If you fall victim to any of the scams above, seeking guidance and counsel is a step in the right direction toward retrieving what you’ve lost.