Mortgage Scams
Have You Been Scammed
And Become A Victim Yet?

Mortgage scams have totally gotten out of control in this country and I don’t believe we’re over this yet, and there is a new wave coming.

Alert: Thousands have become a victim of mortgage scams.

These scams are actually growing as quickly as identity theft and are taken advantage of by any criminal.

It is another way to give them a way to make money and make you their victim.

There are so many variations of mortgage scams it is hard to keep up with it.

The modification plan was supposed to be a salvation for many people and turned out to be a joke.

A family member of mine, I’ll call her Ellen, put in for a loan modification when the President first made the statement that people could put in for this.

It took Months for Ellen to get any answer concerning this.

Ellen kept calling, and calling, and would be told they were working on it, but no one seemed to be able to answer specific questions or give her definite answers.

In other words, the people that were supposed to help you Had No Clue what they were doing.

This program was so big and had so many rules, everyone was confused.

Eighteen Months Later, (yes, you read that correctly), Ellen finally called and was told that they could only modify here loan for 3 months.

Three Months? They call this help? That's not my definition of the word.

I think all us “regular” people had a much different perspective about how this program was supposed to work, considering all the ads and talks on TV that aired.

Everyone was under the impression that this program would stop foreclosures by reducing your mortgage payments, not just for a couple of months, but the total loan would be addressed and reduced.

Ellen couldn’t believe that after all she had gone through, that this was all the bank was going to do for her.

This absolutely would Not solve the problem.

Ellen finally found a woman at her states Attorney General’s office that had the final decision above what the bank came up with.

Ellen was able to get her whole mortgage modified at a rate which wasn’t as low as she hoped, but one that still helped.

It’s a sad state of affairs when you have to go to the extent that Ellen did to get the help the bank was supposed to give to begin with.

  • Contact your lender Before your situation reaches the foreclosure stage, if you are aware there are financial troubles.
  • Lenders are dealing with such an influx of homeowner foreclosures they really don’t want anymore.
  • Most lenders will work with you so you can keep your house.

Don’t wait till the last minute when things are at their worst and you have received numerous notices from your lender.

At this point, the lender is not as apt to want to help.

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Mortgage Scams
The Way You Become A Target

  • Scammers go to a community that is selected very carefully for how quickly they can create a quick contact with that community.
  • The thief usually uses lists that are purchased of delinquent borrowers and public foreclosure lists.
  • Some scammers just go door-to-door, post online ad, distribute flyers and post ads in magazines or newspapers.

If you are approached by someone claiming to be associated with foreclosures make sure you check out the company the person claims to work for to make sure you are dealing with someone that is reputable.

Being approached should also be a red flag that this is probably one of the many mortgage scams.

Mortgage scams come in many different forms such as home equity credit lines that are opened and drained by identity theft.

  • Foreclosure rescue fraud scams - persuade owners of homes into signing the deed to their house over to the thief.
  • “Builder-bailout” scams – through financial trickery, developers get rid of excess inventory.
  • Seller-assistance scams – false appraisals are given to sell homes.

The FBI states the cases of fraud have increased dramatically in the last few years.

The FBI handled more that 1,200 mortgage fraud cases in 2007... a 176% percent increase from 2003, and a 47% percent increase from 2006.


Other mortgage scams include;

Leaseback or Rent-to-own Scams.

  • As part of a deal that allows you to stay in your home as a renter and then the thief buys it back in a few years, is another way a scammer persuades you to give them the title to your house.

Anyone that tries to persuade you to sign the title to your home over to them should be a Major Red Flag.

Don’t do it! Talk to your attorney first.

  • Be aware that buying back your house is almost impossible because of the terms of these deals and the scammer, for all intents and purposes, had no intention of selling your home back to you.
  • Unfortunately, you are evicted when the borrower defaults on their loan.


Bait-and-Switch

  • This scam is supposed to make your existing mortgage current when the scammer convinces you to sign documents for a “new loan modification”.
  • This is definitely a trick and another Red Flag!

In reality, the documents you just signed surrender the title of your home to the scammer for what they term a “rescue” loan.


Phony Rescue or Counseling Scams

  • A scammer assumes the identity of a counselor and convinces you he can negotiate a deal to save your house through your lender.

The catch? You have to first pay him a fee.

  • He will tell you he will handle all the details and there is no need to call your housing counselor, lender, or lawyer.
  • The scammer may also tell you while he negotiates with your lender, and you should make all the payments on your mortgage directly to him, the scammer.


  • To qualify for government mortgage modification programs, some scammers may ask for extremely high up-front fees.
  • Scammers may claim to have been approved by, or affiliated with, the government.
  • One deceit of the mortgage scams trickster is to have a website, or company name, that sounds like a real government agency.
  • They may also include the words “TARP”, “federal”, or other words that are related to the official U.S. government program.

You do not have to pay to benefit from these government programs.

To prevent foreclosure, your lender will be able to inform you if you qualify for any government program.


How To Avoid Mortgage Scams

  • Find out what other homes in your neighborhood have sold for by doing your own research.

You can also look at the recent assessments of taxes of neighborhood homes.

  • Don’t make incorrect or false statements on your loan application such as not telling the truth where the down payment is coming from or stating your income is higher than it really is.
  • This is illegal, so don’t allow anyone to talk you into doing this.

Protect yourself and become knowledgeable concerning what you are looking into.

  • When you want to sell or buy a house, make sure you get mortgage professionals or real estate referrals.
  • Always make sure you take the time to check on their licenses with county, state, or city regulatory agencies.
  • Most of the people that work for these agencies are above-board and honest.

Sadly, it’s a few bad apples that have given the overall profession a bad name.

  • Never, Never sign a document that contains blank lines, or a blank document.
  • Review and read All of the loan document you sign at closing.
  • If you have any questions, concerns, or simply don’t understand what you’re being asked to sign, take the time to get an attorney to review the documents.

Mortgage scams have truly increased in volume in the last few years and are filled with traps. Become educated and knowledgeable to protect yourself from this scam and identity theft.


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