Avoiding Mortgage Scams

 

The housing market is one of the most common environment where scammers thrive. When mortgage gets involved, scammers are often nearby. These crooks often say things that will cause you to doubt but somewhere along the way you start getting convinced and end up paying cash and signing documents that may be the start of a bigger problem.

Scammers are everywhere and it is something that thrives in a market where large amount of high value transactions take place. With this article, we will try to cover how you can avoid these scams and what things you will need to watch out for.

  1. Deed Theft

These are scammers who try to modify or refinance your existing mortgage loan for a better interest, amortization, or technically a better deal. What they do is they get you to sign documentation for the refinancing and formed part of the documentation are deed transfers. In this way, the scammers are able to get the deed transferred under their names and leave the owner wondering how they have lost their property without knowing about it.

  1. Upfront Payment Fees

It is common for a lending company to charge fees for the processing and working on requests. These fees are often charged after the loan period but some lending company charge upfront. Don’t get me wrong, upfront fees mean getting the charges deducted from the loan proceeds that will be provided. If your lender is asking you to pay upfront charges through check, credit card or cash, be very careful. Most probably the company you are working with is trying to scam you for cash.

  1. Lease/Buy Back Agreements

These types of scams are quite deceiving. The scammers ask you to sign a document including the transfer of deed where they make it appear that you would be able to buy back the property from the new owner. While the borrower is deep in financial problems, the scammer will insist that the new owner also allows renting the place for a minimal fee. After all the documents have been signed, the borrower gets evicted from the property.