Warning Signs of Mortgage Relief Scams
Especially during times when many are experiencing financial hardship, mortgage relief scammers take advantage of homeowners under the guise of offering a helping hand. If you receive messages promising forgiven debt, postponed foreclosure or other mortgage relief, look for these warning signs of a scam. Even if the contact appears to have come from a legitimate lender, nonprofit organization or government-chartered mortgage companies Fannie Mae and Freddie Mac, it’s still important to check for these signs as caller ID numbers, logos, letterheads and other company identifiers can be spoofed.
Warning signs of mortgage relief scams
Mortgage relief scams come in many forms, but they often share many similarities. Keep your eye out for these common signs of a scam.
- You’re asked to pay a fee for someone to negotiate on your behalf to reduce your debt. They may claim to have a special relationship with your lender, and they guarantee results regardless of your financial situation.
- They claim to represent a government agency, and they ask you not to contact your lender directly.
- They request important documents such as the title to your home and other property and mortgage information so they can perform an audit of your mortgage agreement and get you a better deal.
- They pitch a deal to rent your home until the renter can buy it or sell it on your behalf (commonly referred to as “rent-to-buy”).
- They ask for payment in the form of gift cards, often requesting you buy gift cards and send them the serial numbers on the cards.
These are all signs that you’re being contacted by a scammer trying to collect funds from fees and even transfer ownership of your home. Often after providing them information and fee payments, they become unreachable.
What you should do if you believe you’re the target of a mortgage relief scam
It’s important to stay vigilant when someone you don’t know contacts you and to know how to take action if you suspect they’re running a scam. If you notice warning signs, here are a few actions you can take.
- Verify the person contacting you truly is from the organization they claim, such as your lender or a government-chartered mortgage company. You can do this by directly contacting the organization using information on their website and asking them to confirm the contact is legitimate.
- Ignore texts, calls, emails, social media messages and letters from individuals guaranteeing you a reduced mortgage debt if you pay them a fee to negotiate on your behalf.
- Report the scammer to the FTC either by an online complaint form or by phone at 877-382-4357. You may also report it to your state attorney general’s office.
- If you have already provided your information to the scammer, contact your lender so they can watch for suspicious activity on your account and put safeguards in place to avoid unauthorized access.
While mortgage relief scams can happen at any time, they are especially common during times of financial and economic uncertainty. Keep your eye out for these warning signs and quickly report them if you suspect you’ve detected a fraud attempt.