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What are some common mortgage scams?

On Behalf of | Oct 22, 2019 | Real Estate Law

If you want to buy a house in Florida or otherwise secure a mortgage, then it is important to understand the process. You should always know what is legitimate and what is not because scams within the mortgage industry occur all the time. This can put you on the hook for a lot of money and cause you some financial trouble if you fall for a scam.

Money explains that mortgage scams come in a variety of packages. Some may target you during the initial buying phase while others hit you up when it comes to refinancing. In any case, you will usually lose a lot of money in these scams.

Loan flipping is where a predatory lender tries to get you to keep refinancing. The lender may urge you to borrow more money each time you refinance. This scam often targets the elderly. The lender charges excessive fees each time, which can eat up all the equity in your home and leave you with a huge payment.

Escrow wire fraud is another issue to watch out for where scammers will try to get you to send your escrow money to them instead of where it should really go. Even if someone seems to have all the right information, always check your paperwork to verify. If anything seems fishy, check it out.

Finally, foreclosure scams are very popular because information about your foreclosure is public record. Scammers will try to capitalize on this and your vulnerability to offer you help. This help is not real and will only cost you money without providing any relief from the foreclosure.

You should always be wary of anyone contacting you about your mortgage or potential mortgage. You should only work with companies you can verify are real and legitimate. This information is for education and is not legal advice.