Mortgage scams aren’t a new thing. They’ve been around for a long time. But there has been a rise in popularity for this particular crime among identity thieves.
Identity thieves don’t commit mortgage scams to get to your identity so much as they are targeting your identity to get to your mortgage. Why is this? It’s because there’s a lot of money in a mortgage scam. A thief can try to bilk you out of your home and then resell it, or he can use your information to run a con game that ends up costing you thousands and ownership of your home. Either way, the thief wins.
Your best protection from mortgage scams is to understand them. The top three scams are:
• Bait and Switch: This is an old scam, in which a thief approaches you about offering you help to get you out of a tough spot. He offers to buy your house at a reduced rate, while leaving the home in your name, or he offers you a loan at a ridiculously low rate. You sign some very complicated paperwork, not realizing you’ve signed a quit claim deed, giving the thief ownership of your home, while leaving you responsible for the mortgage. The scammer sells your house, while you’re still in it, and you find yourself making payments on a house you don’t even own.
• Bailout: A thief offers to rescue you from foreclosure by purchasing your home for slightly above what your remaining mortgage balance is. You’ll stay in the house as a renter, and purchase the home back at the same price it was sold for at some point in the near future. The scammer will charge you rent that is higher than your mortgage payment was, and when you can’t afford it, he’ll kick you out, sell the house at a fair market value, and make a nice profit.
• No-Help Help: A scammer offers to help you prevent foreclosure on your home by assisting you with paperwork and phone calls to work out a deal with your mortgage company. The scam will charge you a huge fee for this service, which you could do on your own for free. No calls are made on your behalf either, and before you know it, your home is in foreclosure and the scammer has made away with money you could have used to get caught up on your mortgage.
Identity thieves will do anything to make money. They only care about your personal information as long as it helps them to reach their current goals. Beware of anyone offering you an easy solution out of your mortgage woes – chances are, the only one being helped is the thief separating you from your money.
