Whether you are a first-time homebuyer or a homeowner of multiple properties, you are a target for mortgage scams. You will receive them in the mail, over the phone, through emails, and even in text messages.

Types of mortgage scams

Bait-and-Switch Schemes

These can come in the form of “too good to be true” interest rate advertisements you see. Once you apply for the mortgage, they will tell you that you don’t qualify for the advertised rate or there may be additional fees to obtain that rate.

Mortgage Wire Fraud

Scammers will impersonate escrow officers, loan officers, real estate agents, or lenders in an attempt to get the homeowner to wire funds to an illegitimate account during the closing process. If the wire does go through, it can sometimes be impossible to recover.

Phony Counseling

Scammers will say they are housing counselors, lawyers, or they’re from the government and will help you lower your mortgage payments or save your home from foreclosure. They will tell you to make your mortgage payments directly to them.

What are some warning signs?

• They will ask for a fee upfront

• Advises you to stop making mortgage payments

• Instructs you to transfer ownership of your property

  Verify your mortgage eligibility (Dec 3rd, 2024)

• Tells you to send your mortgage payment to anyone other than your loan servicer

• Asks you to sign documents with blank lines or spaces

How to avoid mortgage scams

Be alert throughout the mortgage process and ask questions. If it doesn’t look right or you don’t understand the terms, ask to speak to a licensed professional.

• Do not click links or open emails from suspicious senders

• Don’t pay upfront fees

• Ask for their license numbers and look them up

  Verify your mortgage eligibility (Dec 3rd, 2024)

  • Department of Real Estate (DRE)

  • Nationwide Multistate Licensing System (NMLS)

• Know who are the members present in your transaction and ask for their contact information upfront

  Verify your mortgage eligibility (Dec 3rd, 2024)

• Opt-out from receiving offers from solicitors

  • Visit www.optoutprescreen.com

If you are a victim of a mortgage scam or fraud, you should report it to the Federal Trade Commission at https://reportfraud.ftc.gov/#/