It is important that you know about some of the more common home loan scams that exist so that you don’t end up getting burned by one. Some of these scams are actually quite intricate, and it’s easy for even intelligent people to get fooled. If you want to avoid wasting a ton of money, you will need to get all of the information you can on the details of common mortgage scams. The more time you spend doing this research, the better you will be able to protect yourself.
1. Renegotiating Your Home Loan
One of the more common home loan scams that exist involves someone trying to get a person to renegotiate their home loan for a certain amount. You will be able to pay a certain amount of money upfront so that the person can renegotiate your mortgage for a lower interest rate, but it’s all just a scam. Someone might also call you up asking to review your home loan so they can help you reduce the overall amount.
2. Saved from Foreclosure
Another popular mortgage scam that you will want to look out for involves someone calling you at home or even showing up at your door to tell you that you are in danger of losing your home due to missed payments. While it might seem like this scam would be more obvious, these people can be very convincing.
3. The Bait-and-Switch Scam
There is also the old bait-and-switch scam, which is when a disreputable lender says they can give you an amazing deal on a home loan. The catch is that there are a ton of upfront fees from a mysterious third party. If you are ever offered a home loan deal that seems too good to be true, it is crucial that you take a close look at the fine print. Chances are you will find that the deal isn’t nearly as good as you were initially led to believe.
4. Fake Government Programs
Some scammers will call people’s homes posing as a representative of the government, offering a special program that can supposedly lower their monthly payments significantly. Sometimes there is even a website set up to make it appear as though the program is legitimate, but it’s not.
5. Rent-to-Buy Back
In this scenario, a scam artist will attempt to have you sign your deed over to them so they can make payments on your house for you. In exchange for this, they claim that you can still live in your home while paying a lower amount each month. This is another popular scam that you will want to avoid altogether.
6. Shady House Flipping
Flipping houses is very lucrative for a lot of people, but it has plenty of detractors in the housing industry. There are a number of methods that can be used to flip a house, some of which are against the law. One common scam is when someone purchases a house at a low price because of its condition, and then colludes with an appraiser to pump up the value. An unsuspecting buyer is tricked into getting a loan for an amount that is larger than reasonable.
7. Loan Flipping
Some lenders get into the business of flipping home loans, which can have devastating consequences for borrowers. These people will call a homeowner to say that they can help with refinancing. But when the homeowner refinances, they have to pay a slew of fees that can really add up. This is one scam that you do not want to get caught up in.
With so many different home loan scams out there, you will definitely need to make a point of knowing which ones are most common. Thousands of people all across the country get taken advantage of by scam artists, and there are countless ways for them to do so. When you have this information, you will be able to protect yourself from getting ripped off. The last thing you want is to become a victim of one of these scams when you could have easily avoided it by simply educating yourself from the start.