Don’t Give Away Your Home
hand over the keys to your home to a stranger. In just the same way,
homeowners shouldn’t be careless when they choose someone to help
them with their mortgage problems. This is particularly true for
people who are having trouble making home loan payments or are
that appear to rescue people from foreclosure actually aim to
victimize those in financial trouble. The fraud artists behind these
schemes advertise over the Internet and in publications, distribute
fliers and contact people whose homes are listed in foreclosure
records. In some cases, they make their pitches to specific
religious or ethnic groups.
is to alert consumers to the warning signs of mortgage fraud and
spell out the steps homeowners should take to report such scams and
to find trustworthy help.
these fraud artists is the first step victims can take to make sure
that these criminals are brought to justice.
fraud is like robbery without a gun. These fraud artists try to
persuade you that they are helping you stay in your home at a time
when you are most desperate. But in reality, they may be snatching
your home and the value, known as equity, which has built up while
you have lived there. These con artists are watching foreclosure
listings in your area, hoping to take your money and your home.
persuaded by a so-called “mortgage consultant” to sign over the
title to your home under a deal that allows you to stay in the home
as a renter and have a chance to buy back your home when you have
more money on hand. Often the scam artist doesn’t pay the mortgage
and your house gets foreclosed anyway. Other such “deals” are so
expensive that it is nearly impossible to get your home back.
persuaded by a so-called “mortgage adviser” or other person that he
or she can negotiate a deal with your lender if you pay a flat fee
first. You are advised not to contact the lender or a credit
counselor but let the advisor handle the details. But your lender is
never contacted. After you pay the fee, the con artist is gone, and
so is your money.
persuades you to sign “some papers,” often represented as new loan
documents to settle your mortgage debt. But actually, you have
signed over the title to your house to a crook.
“loan consultant” promises to help renegotiate your debt with your
lender if you pay a fee. But instead, the fraudster walks off with
your fee and files for bankruptcy in your name. In some instances,
the bankruptcy filing is made without your knowledge.
mortgages. When you see advertising for mortgages offering “Low
Fixed Rates” or “Very Low Rates,” check the fine print
carefully. Sometimes the attractive interest rate is an
“introductory rate” that lasts only 30 days and then skyrockets.
Also, check to see if the advertised “low rate” is a payment
amount or an interest rate. If the payment amount is less than
the interest each month, then the amount you owe will go up
(called “negative amortization”). Deceptive mortgage ads also
often leave out important facts like the Annual Percentage Rate
for the deed to your house for any reason, whether it is to take
care of your credit or obtain new financing. The deed is the
“key” to your home; don’t sign it over without professional
- Offers to
rent your house to you until your finances rebound.
who entice you to borrow more than you need for the value of
who encourages you to sign forms that contain blank spaces that
will be filled in later. Don’t sign those documents and stop
doing business with this person.
who tells you that “stretching the truth” is OK or encourages
you to falsify information and tells you “it’s done all the
time.” It is not OK. It is illegal, and you could be prosecuted.
rushed. A lender or “consultant” who rushes you, doesn’t answer
all of your questions or doesn’t give you ample time to review
documents is not helping you. If possible, avoid having
document-signing meetings at night. If you feel pressured or
uncomfortable, get a new lender.
- A company
that contacts you first. Some are legitimate but many may be
looking for a target. Always select a company with the advice of
trusted family members or friends.
that sounds too good to be true. It probably is.
County Department of Consumer Affairs, Real Estate Fraud &
Information Program (800) 973-3370 (Los Angeles and adjacent
Department of Real Estate (916) 227-0864, or go online to
To find a
HUD-approved housing counselor: Call (888) 995-4673 or go online to
Business Bureau of the Southland, Inc. (909) 825-7280.