Avoid These Common Real Estate Scams
During the buying, selling, or refinancing process of a home you will be inundated with tons of paperwork and communications from various sources. It can be hard to keep track of everything, and this opens the door to possible malicious threats. Keep reading to find out which real estate scams are most common and how to avoid them in 2022!
Wire fraud usually starts with some type of social engineering tactic. This can take the form of emails or phone communications in which the scammer pretends to be part of your escrow or title company. Usually, they will ask you to wire money to a specific place at a specific time.
As the years go on, scammers become more advanced and have now even started to use fake websites and email addresses that are made to look like the escrow or title company you are working with. Opening any links sent by these fraudulent sources should not be opened, and you should double-check the contact info of your closing agent, title company, and lender whenever contact is received.
The biggest red flag that someone is trying to flip your loan is pressure. If a lender (or someone pretending to be a lender) is consistently pressing you to refinance your home, even when you show apprehension, you should be very cautious. Loan flippers will continue to goad someone into refinancing in a way that has them borrowing more than the last time they refinanced. They will also add on exuberant processing fees, this is how they make their money.
Eventually, it can get to a point where a borrower begins to default on their loans due to lack of equity. A real lender will never pressure you into doing something you don’t want to do, and a trusted mortgage professional is the only person you should seriously discuss refinancing with.
The aforementioned loan flipping scam is a subset of predatory lending, a much more broad topic that encompasses things like loans with exceptionally high rates, lots of hidden fees and penalties, no credit checks, loan packing, or loan ballooning. Loan packing is when nonessential products are tacked onto a loan. Loan ballooning occurs when payments and fees are purposely delayed until later in the timeline of the loan.
A lender who tries to make predatory loans is usually going to target those with bad credit, a low amount of capital, or low income. Finding someone who has gone through the mortgage process before is a great way to find a trusted lender who will not try to swindle you. You can also double-check the credentials of any possible lender to ensure that they are who they say they are. Online reviews can also give a good insight into finding a lender you can trust.
At Equity Mortgage, we work with a variety of clients with varying degrees of mortgage needs. We offer our clients alternative options to their current loan programs with our wide range of mortgage products and flexible lending practices.
Experience fast, professional service for coronavirus mortgaging today and into the future. Contact us for more info or give us a call at 1-800-332-9221.
* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.