Mortgage scams to watch out for

Buying a home can be an exciting process – a little scary at times, but exciting! However as you go through the process, there are some things that may come up and you want to be aware of them!

One of the first things that lenders do is a credit check. Once we pull a hard pull credit report, there are companies that buy lists from the credit bureaus to see who is shopping for a mortgage. The credit bureaus don’t sell your credit report, just the public information such as your name, address and phone number. Once your report is pulled, you may get phone calls from many people. Some are other lenders trying to sell you a mortgage even though you are already working with a lender and in some cases have already locked in your interest rate. Others may be scammers posing as credit repair companies that want to help you fix errors on your report for a fee. There may not be any errors but you may not realize that.

You can avoid these calls by checking your credit report ahead of time, calling your lender if you think there may be an issue or opting out of credit offers. You can go to the website, www.optoutprescreen.com and stop credit offers for a time period. This does take a few days to take effect, so you may want to do it before your lender pulls a hard pull report. I start with a soft pull so we know where your score is and if there is anything we need to work on. This doesn’t give you an inquiry on your report so no one knows you had a mortgage report pulled.

When you are getting ready for closing, you usually have a choice between bringing a cashier’s check or a wire for closing. Many years ago we always brought cashier’s checks to closing and they used to be made out to your own name. Now we have you make the check out to the title company. Wires became more common until we started to see a lot of wire fraud. In the last few years, hackers have become very good at intercepting communications between the borrower and the title company. The emails the hackers would send would look very legitimate and fooled many people. Once you wire funds, it’s almost impossible to get them back and if you wire funds to the wrong place, you may not be able to close on your new home.

The best way to avoid a wire scam is to make sure the wire instructions are valid. Most title companies now send them out in a secure email. I also tell my clients to call the closer to verify the wire instructions, but don’t call the number on the email. I will give you the number to call to avoid any chance of fraud.

Another scam can be a reverse mortgage. If you are a homeowner aged 62+, you may wonder about a reverse mortgage. They are a legitimate option through government regulated financial products that can benefit older Americans. However there are many that use these potential programs as a way to encourage homeowners to take out a reverse mortgage to pay for things like home improvements or even just getting cash back.

Before you sign up for a reverse mortgage, contact US Department of Housing and Urban Development to make sure the source is legitimate. Reach out to an attorney or contact me to make sure you are making the right decision. Also a legitimate professional should never push you to make a quick decision and if they are pushing you, you may want to run the other way!

After closing it is common to get a lot of mail, some of it is great – discounts for different stores, welcome to the neighborhood type of things. However there is a scam going around where you will get a letter that looks very official and tells you to send a fee (usually $89-130) to get a certified copy of your warranty deed. You do not need a certified copy, you only need the copy you get at closing and you will also get one a copy once the mortgage is filed with the county. If you would need a certified copy for some reason, you can go to the county and get one for about $10-12! Because they are offering a service, it’s allowed, but it’s not something you need. If you ever get anything in the mail that you aren’t sure about, please call your lender or your realtor.

To avoid fraud, make sure you use strong passwords. Enable two-factor authentication on your phones and computers. Watch your accounts for strange activity. Be careful when using public wi-fi, it is very easy to get hacked in those situations.

We are here to help you with your mortgage process and will do everything we can to help you avoid fraud. Make sure you send documents securely, we have a couple ways to upload documents securely so you can avoid just emailing them. We want you to have a safe and smooth process and want to make it as easy as we can for you!

Leslie Vanderwerf,  NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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