The Mortgage Industry

The home mortgage industry is one of the most regulated in the United States. Multiple federal and state agencies and industry groups exist to protect consumers’ rights. As a result, there are nearly 50 million active mortgage loans in the United States, enabling millions of families to live the American dream. While the industry is primarily populated by reputable companies, there are some frauds out there. Education and research are your best defense against these con artists. This document describes some of the most common mortgage scams, so you know what to watch out for.

Scam 1 – Deed Theft

Scammers may attempt this maneuver during a mortgage refinance. Among all the paperwork the homeowner has to sign at closing, they slip in a deed document that transfers ownership of the property from the victim to the scam artist. Few people actually read all the forms they sign, so it’s pretty easy pickings. With a swipe of the pen, your home is now theirs. Tip: You should always read every document you are asked to sign, whether for a mortgage or anything else. Your signature is your obligation.

Scam 2 – Phantom Assistance

This scam generally involves the homeowner responding to an advertisement or unsolicited call promising mortgage assistance from some sort of government agency or community group. They promise to prevent your upcoming foreclosure and negotiate better rates and payments on your behalf. They then charge hundreds or thousands of dollars, but never deliver any assistance at all. Tip: Never pay any money up front for mortgage loan services. It is illegal for companies to charge these kinds of fees.

Scam 3 – False Mortgage Transfer

It’s not uncommon for legitimate mortgage lenders to sell your loan to another company. Scammers take advantage of this by sending false letters saying their company just purchased your mortgage and you should start sending your payments to them. Those payments are never applied to your mortgage. Instead, the scam company keeps the money while your real loan company may foreclose, thinking you’re defaulting. Tip: If your mortgage is truly sold From one lender to another, you’ll Receive letters from both. Feel free to call both institutions to verify everything is on the up and up.

Scam 4 – Lease/Buybacks

Con artists search public records to find people with homes in foreclosure. The scammers convince victims to sign a quit-claim deed transferring ownership of the property to them. They are told they can lease or rent the house until they’re back on their feet and then ownership will transfer back. Once the deal is signed, however, it’s likely the scammers will lock you out of the home, leaving you with nothing. Tip: If you can’t afford your mortgage payment, you won’t be able to afford the inflated rent the buy-back scammer will charge either. These schemes are always a bad idea.

Finding a Reputable Lender

There are many trustworthy mortgage lenders who can help you identify genuine options for purchasing or refinancing a home. Selecting the right lender makes the process secure and comfortable for you and your family. Following the steps on the following pages should help you feel confident you’re working with a mortgage lender you can trust.

Finding a Reputable Lender

STEP 1: Check out their website. A legitimate mortgage lender site should provide multiple mortgage options, provide loan calculators and offer advice and resources. The contact page should also include a street address you can confirm and at least one phone number you call.

Finding a Reputable Lender

STEP 2: Read online reviews. The best mortgage lenders will offer reviews and testimonials from happy customers on their websites. You can also look at third- party review sites like Zillow.com. Zillow is very popular and has reviews on nearly every mortgage lender out there. Check out these customer reviews of New American Funding.

Finding a Reputable Lender

STEP 3: Look for the Mortgage Bankers Association logo. The MBA helps regulate the mortgage industry. Its members are among the most respected companies in the home loan business. Members usually have the MBA logo somewhere on their website’s home page, contact page or affiliations page.

Mortgage Scams to Avoid

To Purchase or Refinance with a Company You Can Trust, Visit…

www.NewAmericanFunding.com