Someone poses as a credible real estate professional and then scams thousands of dollars – or more – from an unknowing and unsuspecting individual. That’s the sad truth about mortgage fraud. These criminal acts are a black eye on the industry. But the National Crime Prevention Council (NCPC) is fighting back, with a Mortgage Fraud toolkit. We help you help victims through these tough times.
Knowledge is the first step. Victim service providers can help identify the type of fraud and guide victims to viable solutions.
Common Mortgage Fraud Scams
Home Equity Conversion Scheme: Fraud inflicted on seniors over 62 years of age who are eligible for a Home Equity Conversion Mortgage (HECM). Fraudsters target the victim through local churches or investment seminars, persuading the homeowner to apply for a HECM to pay for home renovations. The con artist convinces the victim to sign contracts without reading the fine print about repairs and repayment. The all too familiar ending? The fraudster makes off with the cash, leaving the homeowner with unfinished repairs and a large debt.
Signs to look for:
- Senior is persuaded to assign power of attorney to another party
- Underwriter requests communication only be handled through the con artist/person with power of attorney
Loan Modification and Advanced Fee Scheme: Targets are those who are delinquent on mortgage payments. The fraudster will offer to save the homeowner from foreclosure by renegotiating the mortgage loan with the lender. The crook may even offer to completely eliminate the debt. The kicker? The fraudster will demand a large upfront fee to make all of the homeowner’s problems disappear. But the only thing that will disappear is the con artist with the paid fee in hand, leaving the homeowner with even bigger problems.
Signs to look for:
- The company or person will attempt to charge the homeowner a large upfront fee – red flag!
- The homeowner is directed to avoid contact with their mortgage lender.
These are examples of the many types of mortgage fraud that scammers use to prey on victims. We help you fight back. For a complete listing of mortgage fraud schemes and other training materials, get the NCPC’s Mortgage Fraud Toolkit.
Other resources: Watch the NCPC Mortgage Fraud Prevention PSA.