Unfortunately we’ve become all too familiar with the scam emails and phone calls. We know better than to fall for the old, “Your car’s extended warranty has expired.” But the criminals are only getting craftier; never missing an opportunity to prey on their next victim.
In 2020 alone, more than 13,600 victims reported instances of real estate or rental fraud, according to data from the FBI’s Internet Crime Complaint Center.
Here are some common real estate scams to be mindful of, so you and your loved ones don’t become the next target.
Loan Flipping
Loan flipping is the process of raising cash periodically through successive cash-out refinancings.
In this scenario, the scammer convinces the homeowner to refinance their mortgage, but it provides no benefit to the homeowner. The transaction may look appealing at first and even put the homeowner a few thousand dollars ahead. However, that amount is easily eaten up by excessive fees and increased monthly payments, especially when a borrower’s loan is refinanced multiple times within a short period.
A good sign of a scam would be a lender that you’ve never had contact with is sending relentless emails about their offer. Only communicate with lenders you have previously done transactions with and discuss everything in person if possible.
Forbearance Assistance
Since homes in pre-foreclosure are public, the con-artist will access these records hoping to capitalize on homeowners’ vulnerability. Scam artists contact the homeowner and claim to provide financial relief – with a large up-front fee, of course. And with the recent pandemic creating financial hardships, these types of forbearance relief scams are only getting worse.
Never seek financial relief from a third-party – especially if your only contact through them is by phone and email. The best way to avoid foreclosure is to work directly with your lender to make a financial arrangement.
Moving Scams
Did you know the Better Business Bureau receives an average of 13,000 complaints and negative reviews about movers each year? But it’s not just poor customer service driving the complaints. A recent study found that complaints were due to dishonest moving companies price gouging and even taking belongings hostage.
You can read more about the BBB study here.
Imagine it’s moving day and you’re both excited and stressed to get into your new home. After putting down a large deposit with a moving company and loading all your belongings on their truck, the driver then claims that the actual amount of goods to be moved exceeds the initial estimate and demands more money. Since all belongings are in the mover’s control, this often forces people to pay astronomical fees that were not agreed upon.
Always ask the moving company for their license number, and see if any complaints have been filed with the Federal Motor Carrier Safety Administration.
Also, get quotes in writing or in person. If the moving company will only provide an estimate over the phone, it’s time to look for another one.
About Michigan Home Lender, Julie Krumholz
With 35 years of industry experience, Julie Krumholz has worked in nearly all aspects of mortgage banking.
Throughout the years she has worked in processing, closing and loan origination, underwriting, QC auditing and has even co-owned a mortgage brokerage firm.
If you are looking for an experienced mortgage lender in Michigan, call Julie from Superior National Bank today at: 586-382-5482.
