Scammers sometimes contact homeowners who are having trouble making their mortgage payments to offer them “help.” Criminals like this promise to help you keep your home or sell your home without having to go into foreclosure, for a fee — but they’re just out to take your money, not help you.
These scam operators find potential victims in several ways:
Advertising online and in local publications
Contacting people whose homes appear in the foreclosure notices (they can easily find these notices online or in a local newspaper)
Most mortgage professionals are trustworthy and provide a valuable service, helping you to buy or refinance your home. But dishonest or "predatory" lenders do exist and engage in practices that increase the chances of borrowers losing their homes to foreclosure.
Learn about the types of scams that predatory lenders use to trick you. The Department of Housing and Urban Development (HUD) has counselors available across the country to help you navigate mortgage professionals, look out for scams, and choose the right loan type for you.
Predatory lenders may try to:
Sell properties for much more than they are worth using false appraisals
Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan
Knowingly lend more money than a borrower can afford to repay
Charge high interest rates to borrowers based on their race or national origin and not on their credit history
Charge fees for unnecessary or nonexistent products and services
Before you buy a home, attend a homeownership education course offered by a U.S. Department of Housing and Urban Development (HUD)-approved, non-profit counseling agency.
Interview several real estate agents, and ask for and check references before you select one to help you buy or sell a home.
Get information about the current values and recent sale prices of other homes in the neighborhood.
Hire a qualified and licensed home inspector to carefully inspect the property before you are obligated to buy.
Determine whether you or the seller will be responsible for paying for the repairs.
Shop for a lender and compare costs.
Be suspicious if anyone tries to steer you to just one lender.Learn more about how to spot predatory lending and how to protect yourself.
Rental scams happen when either a property owner or potential tenant misrepresent themselves or the terms and availability of a rental property. Fake ads and fake responses to rental ads can hurt both tenants and property owners.
Get everything about the terms of your rental including fees, rent, maintenance, condition, and improvements in writing and signed by both you and the owner/manager of the property as part of your lease.
Do a search on the owner, real estate management company, and listing. If you find the same ad listed under a different name, that’s a clue it may be a scam.
Research national non-government real estate websites to see if an ad you are considering is listed in another city with duplicate pictures or wording that a scammer might have copied.