Wendy Wilson

Are you a homeowner looking to refinance in the near future? If so, you may be a scammer’s next target. From phone calls to emails to fake websites, scammers know exactly how to lure in unsuspecting victims.

Mortgage refinance scams are designed to steal your personal information and money. Many of these scams promise extremely low mortgage rates for a small fee. Other scams target homeowners who are struggling to make their monthly payments in the name of offering “relief.”

With that said, it can be hard to know if the refinancing offers you receive are legitimate or not. At the end of the day, if something seems “off” or too good to be true, it probably is. Always trust your gut.

Here’s what you need to know about identifying mortgage refinance scams so that you don’t become the next victim.

Most Common Mortgage Refinance Scams

If you’ve received an offer for a program you didn’t apply to, or if the offer is requesting personal information, be very suspicious. While it’s not uncommon to receive legitimate refinancing offers in the mail, it’s best to be wary.

Most refinance scams guarantee a low interest rate, but all of them come with a catch. Maybe you’re required to fill out a form with your personal information or pay a nominal fee before the process can get started.

Other scams take things a step further by asking homeowners to sign over their home’s title in exchange for assistance.

Scammers are known to ask for all sorts of personal information, including:

  • Name
  • Address
  • DOB
  • Social Security number

Using this information, they can steal your identity or sell it to someone else to do the dirty work.

If you receive an offer from a company or individual that you don’t know promising a lower interest rate, this is a huge red flag. Most offers that you receive in the mail, by phone, or via email are scams.

If you believe a refinancing offer might be legitimate, research the company thoroughly before paying for services or providing your personal information.

How to Minimize the Risk of Getting Scammed

While there are countless mortgage refinance scams out there, the good news is that there are many ways to protect yourself. Here are some of the best things to do to greatly minimize the risk of becoming a victim of a refinance scam.

Never Pay Upfront Fees

If you receive a mortgage refinance offer that guarantees “mortgage relief,” it’s not uncommon for scammers to ask for an upfront fee. The “fee” enables them to work with your current lender to get the refinance process started.

Scammers will also tell homebuyers to stop paying their mortgage and to instead send that money to the relief agency. Others ask for wire transfers or for victims to buy prepaid debit and/or gift cards.

All of these avenues are untraceable, which enables scammers to make money while continuing their malicious acts.

No legitimate refinancing agency will ask for fees upfront. In fact, paying for something before you receive it is illegal. Per the Mortgage Assistance Relief Services Rule, a company can’t collect fees until the homeowner has received and accepted an offer of relief from their lender.

Think of it this way: would you give someone money for a car that they promise to bring you next week?

Delete Suspicious Emails

Deceptive emails are one of the most common methods to scam homeowners out of money and their personal information. If you get an email from what appears to be a real lender, look at the sender’s email address and any URLs in the body of the email.

Scammers typically use fake emails that mimic a real lender’s email. They also use fake URLs that redirect you to a site that is used to steal your personal information.

Don’t click on any links in an email that seems suspicious. If you can’t verify the sender, call your lender and ask. Otherwise, mark the email as spam and delete it from your inbox.

Reach Out to Your Lender

To avoid mortgage scams, be proactive. Don’t wait for a refinancing or “mortgage relief” company to reach out to you. Instead, reach out on your own.

Whether you’re struggling to make monthly payments or if you simply want to lower your rate, the first and best person to contact first is your mortgage lender. This way you don’t have to worry about responding to a fake email or phone call.

Make Note of Other Scams

As a homeowner, you’re the ideal target for scammers. Even if you aren’t looking to refinance, you can still become the victim of a malicious actor. Not only do scammers prey on people looking to refinance, there are also mortgage closing scams as well as mortgage protection plan scams.

If something seems fishy or too good to be true, don’t bother taking it any further.

Top Avenues for Help

Looking to refinance your home because you’re at risk of foreclosure? Having trouble paying your mortgage due to a lost job or some other financial issue? If so, personalized assistance is available. Call the Homeownership Preservation Foundation at 844-995-HOME and 888-895-HOPE. This is a non-profit organization that helps potential homebuyers and at-risk homeowners.

To learn more about debt relief options, contact the National Foundation for Credit Counseling at 800-388-2227. You can discuss your financial issues with a certified credit counselor.

If you believe you’ve been the victim of identity theft or fraud, file a police report immediately. Your local law enforcement agency should be able to help. After filing an initial report, contact your state attorney general’s office as well as the Federal Trade Commission.

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