CLEVELAND — Mortgage and Real Estate Scams
As you may know, it's home buying season. Which means homeowners, and those in the market for one, have big targets on their backs from scammers. Last year alone, the FBI said real estate fraud caused more than $149 million in losses.
The biggest cons:
Escrow Wire Fraud
Here, buyers will be contacted by someone pretending to be from their title or escrow company, with instructions on where to wire funds.
Well, thieves call from “spoofed” telephone numbers that make you think it’s your company. Or, they set up fake websites that look similar to the company you're doing business with, but maybe one number or letter is off.
You send the funds, they withdraw the money and disappear.
Before you ever send money to a third party, go back to the original documents used for your transaction and call those phone numbers to make sure you're sending money to the right people.
Loan Flipping
That's when a predatory lender convinces a homeowner to refinance their mortgage sometimes repeatedly and gets them to borrow more money each time against the equity in their home.
The scammer charges high fees and points with each transaction, and homeowners get stuck with higher loans.
If lenders are actively seeking you out, that's a warning sign. Stick with known banks or lenders and question all fees.
Foreclosure Relief
Scammers have access to public records of homes in foreclosure. They know you're desperate and will offer help. Some say they're affiliated with the Government.
If you are in trouble, don’t deal with a stranger. Work directly with you loan service or a HUD accredited housing counselor to see what options you have.
As an example of this fraud, you may remember the story we did on St. Ambrose Catholic Parish in Brunswick a few months ago. They were scammed by wire fraud.
Someone contacted them pretending to be the contractor who did work for them, and told them they needed to wire money to an account different from the one they had been using.
They sent nearly $2 million dollars to the scammers, and the thieves ran off into the sunset. It didn’t deal with a mortgage, but it’s the same con.
Three Things You Probably Shouldn’t Waste Money On.
Premium gas
Unless your car mandates you use it, skip it. Depending on the day, you can save yourself up to 70 cents a gallon.
Extended Product Warranties
We spend billions of dollars on these. Some experts say less than 20 cents on every dollar you pay, gets paid out in claims. And many credit cards will automatically double your warranty. The warehouse clubs also offer them for free.
Amazon Prime
I’m on the fence with this one because I love my Prime membership. But the company now offers free standard shipping on orders $25 and more. However, if you take advantage of the other perks, like free movies and shows, their cloud services or music streaming then it's a great deal.