The last thing you want to worry about while purchasing, renting, or refinancing a house is getting duped. Unfortunately, crooks are becoming increasingly inventive in their approaches to customers. According to data from the Federal Bureau of Investigation’s Internet Crime Complaint Center, more than 11,578 victims reported incidents of real estate or rental fraud in 2021 alone.
Here are five common real estate and mortgage scams to be aware of and recommendations on how to avoid becoming another statistic. Read on!
1. Escrow Wire Fraud
In this scam, the buyer or seller is contacted by someone posing as a representative from their real estate company or title company. This person then provides new bank account information for the wiring of escrow funds. The imposter may even go so far as to send a fake email that appears to be from a legitimate company to appear credible. This fraudulent activity can often go undetected until it’s too late and the money has been transferred out of the account.
To avoid this scam, always contact your real estate professional or title company directly to verify any changes in banking information. Do not wire money to anyone without verifying that the receiving account is legitimate.
2. Foreclosure Relief Scam
With this scam, criminals pose as representatives from a government agency or mortgage company, promising struggling homeowners that they can help save their homes from foreclosure. The scammers will require an upfront fee for their services and will often disappear once they have been paid. Not only will the homeowners be out of money, but they may also find themselves in an even worse position as their home is still in foreclosure.
To avoid this scam, remember that you should never have to pay for assistance in avoiding foreclosure. There are many legitimate government programs and nonprofit organizations that offer this type of help for free.
3. Loan-Flipping Scam
In a loan-flipping scam, a criminal will convince a homeowner to refinance their mortgage loan multiple times in a short period to rack up fees. This often leaves the homeowner with an unmanageable amount of debt and risks losing their home.
If you’re approached about refinancing your mortgage, be sure to do your research before moving forward. You should only consider refinancing if it makes financial sense for you and your family, and be sure to use a reputable lender that you trust.
4. Fake Listings and Rental Scams
With the rise of online rental listings, criminals have taken advantage of unsuspecting victims by listing properties for rent that don’t actually exist. These fake listings often include photos and details about the property that make them appear legitimate. Once someone expresses interest in renting the property, the scammer will request a security deposit or first month’s rent be paid in advance. The victim will then find out that the listing was fake and they have lost their money.
To avoid this scam, be sure to only work with reputable rental listing sites and never send money to someone before seeing the property in person.
5. Title or Deed Scam
In this type of scam, criminals will pose as title or deed companies offering home buyers assistance with buying a property. The scammer may even go so far as to send fake documents purporting to be from the government or a legitimate title company. They will then require an upfront fee for their services before disappearing with the victims’ money.
To avoid this scam, you should only work with a reputable title or deed company that you trust. Be sure to do your research and never pay an upfront fee for these services.
Conclusion
Remember, if something sounds too good to be true, it probably is. Be sure to do your research and work with reputable businesses and organizations to avoid becoming the victim of a real estate or mortgage scam.
If you need to find Southern California realtors, look no further as Century City Realtors is here to help. Century City Realtors is a premier team of real estate professionals committed to providing quality service regardless of the kind or size of your real estate transaction. You will access their vast network of agents, developers, and referral partners who have significant knowledge of the Southern California real estate market. Contact them today!
Leave a Reply