Beware Of Scams Targeted At Homeowners!

While it’s true that we’re currently in the season of ‘good will towards men’, unfortunately, there are plenty of scam artists out there who would contradict this. A sad reality of our struggling economy is the increase in the number of homeowners being targeted (and falling prey to) scams and con artists. Scroll down to view 5 common scams currently targeted at homeowners.

Recently, multiple online mortgage relief scams targeted toward homeowners struggling to make their monthly mortgage payments were shut down by the federal government.

Per CNN – “Hundreds of con artists have been taking advantage of victims through online advertisements on search engines Google, Bing and Yahoo!, promising to help homeowners modify their mortgages through the government-run program known as the Home Affordable Modification Program (or HAMP).

Last week, the agency that investigates fraud, waste and abuse in the government’s Troubled Asset Relief Program, announced that it has shut down 85 scams that were advertising on Google. Then, on Monday, it announced it had halted another 125 shady advertisers on Yahoo and Microsoft’s Bing search engine.”

 *Read the full CNN article here.

With the internet so readily at hand, most struggling homeowners are using online searches to find help for their situation. And, with HAMP and other aid programs available, these scammers are targeting these homeowners based upon search terms and online ads resulting in the homeowner being taken advantage of and exploited in their time of need.

Here are 5 common scams* homeowners should be aware of: (*Source: The Street, “5 Scams Making Suckers Out Of Homeowners“.)

1. Loan-modification scams:

“This scam targets people facing foreclosure, with fraudsters promising to negotiate a loan modification for them in exchange for big upfront fees. Lenders do approve such modifications these days, but the U.S. Department of Housing and Urban Development prohibits legitimate foreclosure-prevention counselors from charging advance fees to help you negotiate one.” Don’t be fooled by large, fancy offices or ‘official’ sounding company names or sleek websites.”

Bottom Line: Do not pay any upfront fees — If it sounds too good to be true, it probably is.

2. Deed-theft scams:

“Also called “bait and switch,” this scam also targets homeowners desperate to avoid foreclosure. The scammer poses as a mortgage lender or broker who’s agreed to refinance or modify your loan on generous terms, bringing a huge stack of paperwork for you to sign. What you don’t realize is that the person has slipped in a page that signs over your property to them for nothing. The scam artist throws out everything except this one page, which they file with your local land-records office. Then they sell your home out from under you, often to a fellow crook who’s conned a bank into providing a mortgage.”

Bottom Line: Read EVERYTHING before you sign. Don’t get so focused on looking at the numbers (the promised lower interest rate or monthly payment) that you don’t see the real terms or fine print.

3. The “Your mortgage has been sold” scam:

“Another simple but effective con game, this scam starts with you getting an official-looking letter that appears to come from your mortgage lender. The letter informs you that your mortgage has been sold to a new lender and gives you a company name and address to start sending monthly payments to. Real lenders send such letters all of the time — but so do crooks. Follow a fake letter’s instructions and you’ll end up sending your mortgage payments to a scam artist for months. You’ll only realize your error when your real bank writes to complain that you’ve missed several mortgage payments and warns that it’s beginning foreclosure proceedings.”

Bottom Line: If you receive such a letter, call your lender immediately to confirm the details are real. Do not call any  numbers on the letter itself as you’ll end up talking to the scammers. Find a past mortgage statement and call the contact number listed.

4. Home-repair scams:

“You answer a knock on your door one day and find a workman wearing coveralls and a sheepish look on his face. “Hello, there,” the man says politely. “We were in the neighborhood fixing a roof and we noticed that your roofline looks crooked. We have some leftover materials from the other job and can fix it right now if you’d like for a really good price.” You cut a deal for the work, hand over the payment — often in cash — and the workman and his crew set up. But in reality, they usually dawdle around for an hour or so, then take off with your money.

The Better Business Bureau says scammers most commonly pose as roof-repair or driveway-sealing workers — and find easy marks in today’s bad economy. “Homeowners who in better times would have been proactively doing repairs let things slide,” the BBB’s Hutt says. “So if someone comes to door, the consumer — particularly an elderly person — can be taken advantage of because they know the roof hasn’t been checked in a while.”

Bottom Line: Hire your own contractors! If you need work done on your home, it pays to do your research ahead of time so that you hire a trusted professional.

5. “Certified-deed” solicitations:

“Check your mail and you might find an official-looking letter suggesting that you pay $60 to $100 or so for a “certified” copy of your home’s deed. These solicitations, which seem like they come from a government agency, typically include detailed information from records on file about your property — such as the date your local land-records office officially recorded your home purchase. But read the fine print and you’ll see that the letters come from private companies, not the government. Certified-deed firms charge big bucks to contact your local land-records office and order a certified copy of a deed you could easily get yourself for a few dollars.

“I tell people: ‘If you really want a certified copy of your deed, contact us directly and for $2 we’ll send you one,’” says William O’Donnell, a suburban Boston register of deeds who’s been warning consumers about these solicitations for years. O’Donnell says certified-deed offers are technically legal, “but you really have to question the ethics of them. They imply that your kids aren’t going to be able to enroll in high school or things of that sort without a certified copy of your deed — but that’s not true.”

Bottom Line: “…homeowners rarely if ever need certified copies of deeds, O’Donnell says. “Is it a nice thing to have? Yes, but people shouldn’t worry if they don’t have one.”

The internet definitely can be a great source of information, but don’t let your struggling financial situation cloud your judgement. At the end of the day, if you need help, there may be programs available that are legitimate. Call a trusted lender or financial advisor to see what options are available to you based upon your specific situation. Don’t let yourself fall prey to any of the above scams (or multiple others out there)!

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