How to Spot a Mortgage Loan Scam
- 1). Avoid signing anything that you do not understand, advises the Home Loan Center website. In a mortgage scam, the scam artist may try to get you to sign documents without reading them. In order to avoid this problem, take your time before signing any documents and make sure that you understand exactly what they say. You should never sign a blank signature page that allows the scam artist to fill in the details later.
- 2). Stay away from seminars that hype the benefits of investing in real estate or buying homes. Many scam artists use this method as a way to get to unsuspecting consumers. They may offer a free seminar with a gift or meal. The scam artists may try to get you to agree to purchase a house using their lending strategies. These scams have been known to cost investors money over the long term.
- 3). Ignore any offers from companies that actively try to help you when you are in trouble with your mortgage. There are businesses that prey on innocent homeowners who are having trouble making their mortgage payments. They may offer to pay off the house for you and allow you to pay them rent to live in the house. Then they have the right to kick you out of your home and keep your equity once the sale goes through.
- 4). Avoid situations in which you are promised a certain amount of money for going along with a fraudulent mortgage process, advises the Freddie Mac website. Some fraudulent lenders who attempt to get loans on properties may pay consumers to become involved. These scams are illegal, according to the Home Loan Center, and they could make you an accomplice to a crime. If someone approaches you about a mortgage scam such as this, it is best to avoid it completely.
- 5). Stay away from people who come to your house or call you in regard to home equity products. For example, contractors or a sales person may offer to help you improve your home. If you cannot afford the construction, the contractors may suggest that you obtain a home equity loan from a lender who they commonly work with. When this happens, the contractors ends up with your money and you lose your home equity.
