How To Avoid A Mortgage Scam
Bad times for millions of homeowners facing foreclosure is turning out to be good times for scam artists. Some homeowners become so desperate, they fail to exercise basic good judgment. And scamsters are becoming ever more sophisticated.
According toFannie Mae, the most common "Foreclosure Rescue" scheme goes like this:
A homeowner in trouble is approached and offered a deal that will allow him to stay in his home, as a renter, in return for the deed to the property. The scam artist also usually offers a repurchase deal, so the homeowner can buy the house back when they are in better financial shape.
Once the miscreant has the deed, he sells the house, uses the proceeds to pay off the delinquent loan, pockets the equity and disappears.
Warning signs for this scam include:
- Being approached by a stranger with an unsolicited "rescue" offer.
- Receiving an unsolicited call, mail or flyer about "foreclosure rescue" or saving your home.
- Participating in a complicated deal that you don't fully understand.
- Signing documents that have blanks or false statements. Regardless of what you are told, this is never okay.
If you suspect that you have been a victim of mortgage fraud or are aware of a possible scam, you can report it by calling the Mortgage Fraud Hotline 1-800-4FRAUD8 (1-800-437-2838).
In California, you can also contact the State Attorney General's Office.
