Wednesday, October 10 2012
Freddie Mac’s fraud unit is teaming up with real estate professionals who list HomeSteps homes to sniff out bogus rental ads of REO properties — a growing problem, according to Freddie Mac.
“We’re hearing more reports about fraudsters trying to cash in on the housing crisis’s remaining foreclosed homes by advertising them as rentals on the Internet,” writes Freddie Mac in a recent blog post warning about the Craigslist REO rental scams.
The scam works like this: After a house is sold at foreclosure, a scammer then posts an ad online trying to rent out the home before the new owner moves in. Interest renters then contact the scammer about leasing the property, and they are asked to submit their personal credit information for the lease application as well as two months of rent.
It’s often not until the would-be renters try to move in that they realize they’ve been duped: The key to the house doesn’t work or they find the house is for sale or even that the previous owners are still living there. There have been some cases where scammers change the locks in the house and give the renters a working key. It’s the real estate listing agent who then often discovers the renters living there and the scam.
Freddie Mac and real estate professionals are working together to find the fake Internet rental ads. When they do, they are having the ads removed immediately. They’re also warning renters on how not to be duped from the ads, such as always verifying the home’s status through a listing agent or through county records.
Source: “Caveat Renter: Fraudsters Falsely Advertising REO as Rentals,” Freddie Mac Blog (Oct. 8, 2012)
Wednesday, January 18 2012
Scammers have targeted delinquent borrowers during the past few years, hoping to take advantage of their desperation and financial inexperience. Their approach typically involves posing as a representative of a nonprofit or government agency who can help with a loan modification or some other form of assistance.
Sheri Stuart, education manager at Springboard Nonprofit Consumer Counseling, says she frequently encounters consumers at courses offered by her organization who have been victimized by these scams. Stuart says she recently met a couple from Southern California at one of these events who’d paid $3,000 to a fraudulent company in an attempt to keep their home out of foreclosure.
“It’s disconcerting,” she says. “It has a ripple effect. It not only affects the home owners, it affects the communities as well.”
To keep more consumers from being taken in by these scams, Stuart offers the following four red flags to help determine whether borrowers’ knight in shining armor is actually a swindler on the make:
1. They ask for money up front. “That’s usually an indication that someone has an ulterior motive,” Stuart says.
2. “Phantom help” appears out of nowhere. If a consumer hasn’t proactively contacted anyone about missed mortgage payments, but suddenly gets calls and mail about getting help for missed mortgage payments, it’s probably a scammer.
3. They present phony credentials. Many companies that claim to offer assistance will have official-looking seals from credentialing institutions on paperwork, promotional materials, and Web sites. Research those organizations to make sure they actually exist.
4. They make promises they can’t deliver. If they make ambitious guarantees about being able to modify loans or halt foreclosures, that should set off alarm bells. “Nobody can promise you a loan mod,” Stuart says.
If your clients suspect they have been or are being targeted, point them to Loanscamalert.org to get more information and report the scammers.
By Brian Summerfield, REALTOR® Magazine http://realtormag.realtor.org/daily-news/2012/01/13/4-ways-id-borrower-assistance-scammers
Thursday, December 08 2011
Some scam artists are preying on home owners looking to refinance using the government’s Home Affordable Modification Program. As such, federal agencies are banding together forming a task force aimed at cracking down on con artists who are falsely claiming they can save home owners’ mortgages through HAMP, HousingWire reports.
The new task force recently issued a warning to home owners looking to refinance their mortgage: Only your mortgage servicer can grant you a loan modification through HAMP so don’t be duped by scam artists saying they can help with HAMP. Any third-party promising to guarantee a loan modification or pre-approve a loan modification or trying to charge an advance fee for a loan modification may be involved in a scam, the agencies warned in a public statement.
The task force cautions home owners to "beware of individuals or companies that ask you for payment and tout success rates or claim to be experts in HAMP."
The federal agencies involved in the HAMP fraud investigations are the Office of the Special Inspector General for the Troubled Asset Relief Program, the Consumer Financial Protection Bureau, and the Department of the Treasury.
To check on the validity of companies or individuals who display HAMP seals or logos, call the HOPE hotline, 888-995-HOPE.
Tuesday, September 27 2011
Crooks go where the money is. So with Americans spending as much as $22 billion a year on construction projects, it’s no surprise that home improvement has become a favorite target for fraud artists. Some of these shady characters use amazingly well-polished contractor scams that are tricky to spot until it’s too late.
The vast majority of contractors are honest, hardworking professionals. Protecting yourself against the few bad apples requires checking references, having a solid contract, and being alert to the warning signs of these top five contractor scams.
Scam 1: I’ll need the money up front
This is the most common ruse reported to the Better Business Bureau. Your contractor explains that because he has to order materials and rent earthmoving equipment to get the job started, he needs, say, 30% to 50% of the project price up front. Once you’ve forked over the dough, one of two things happens: He disappears on you, or he starts doing slapdash work knowing that you can’t really fire him because he’s sitting on thousands of your dollars.
When you first meet with the contractor, he’s very agreeable about doing everything exactly to your specifications and even suggests his own extra touches and upgrades. Some of the details don’t make it into the contract, but you figure it doesn’t matter because you had such a clear verbal understanding.
You’re legally required to get a building permit for any significant construction project. That allows building officials to visit the site periodically to confirm that the work meets safety codes.
The job is already under way, perhaps even complete, when this one hits. Suddenly your contractor informs you that the agreed-upon price has skyrocketed. He blames the discovery of structural problems, like a missing beam or termite damage, or design changes that you made after the job began.
Wednesday, June 22 2011
Some home owners are getting a surprise when a person shows up on their doorstep, with a lease agreement in hand, saying that he or she is renting out their home, which isn’t for rent but for sale.
Law enforcement and real estate professionals are finding a growing scam involving for-sale listings being promoted as rentals--without home owners’ consent.
Scammers are taking listing information of homes for-sale--including photos--and then reposting that information on rental sites and tweaking it to pass the home off as a rental. The scammers then use a fake lease agreement and collect rent from unsuspecting consumers.
And when the scammers don’t present keys for the property, they give the unsuspecting renter permission to call a locksmith to gain access to the home.
Les Sulgrove, president of the Des Moines Area Association of REALTORS®, recently issued a warning to association members about the scam. He suggested real estate professionals set up Google alerts for the home addresses they’re listing so they’ll learn if their clients’ information is being misused on another site.
“All it takes is cutting, pasting, and changing some key pieces of data,” Geoff Greenwood, spokesperson for the Iowa Attorney General’s office, told the Des Moines Register. “People find out the hard way what they paid for wasn’t for sale or for rent.”
Source: “Growing Online Scam Uses Legitimate for-sale Home Listings to Trick Renters,” Des Moines Register (June 5, 2011)
Sunday, September 19 2010
Friday, September 17 2010
The Indiana State Police are investigating a cash based scam that involves sending money via a commercial wire service. The scam appears to be targeting only elderly residents with one couple losing more than $3,000.
How does it work? An unknown person will telephone an elderly resident and tell them that a family member has been arrested and needs bond money to be released from jail. The suspects will identify the victim’s family member, usually a son or daughter or grandchild, and then identify themselves as a ranking representative of a certain police agency.
Then the victim is told a lengthy set of unusual circumstances surrounding the arrest, often portraying the arrested family member as an unfortunate participant that happens to be in the wrong place at the wrong time. The trap is now set and unsuspecting elderly family members begin the process of feeling sorry for their relative and engage in the conversation of how to wire the money to the police representative.
When the elderly victim conducts the initial wire transaction, a routing number is provided only to the victim. After the money is "wired" the victim is told to call the "police agency" back at a provided number. An unknown person will answer with the name of the police agency and when the victim requests to talk with the ranking officer they believe they had talked with previously, the person will "page" the requested officer. When that person answers, a conversation occurs where the victim is told to change the routing of the cash to a different city in the US. The routing number is then requested by the suspect and usually provided by the unsuspecting victim. Once the routing number is given, the cash can be obtained from any location in the world.
ISP reminds Hoosiers to use extra caution when dealing with unknown individuals by telephone or internet.
Friday, June 18 2010
The FBI says it will renew its efforts to end mortgage fraud. A spokesman said last week that the FBI anticipates arresting hundreds in crackdowns scheduled over the coming weeks.
Offenses agents expect to find range from schemes that encourage borrowers to lie about their incomes to scams that rely on falsifying foreclosure information.
The FBI has set up 23 fraud task forces across the U.S. to carry out the anticipated sweep.
Source: Financial Times (06/11/2010) http://www.realtor.org/RMODaily.nsf/pages/News2010061403?OpenDocument
Thursday, June 03 2010
Home equity loan and refinancing scams can cost you more than money—these scams can cost you your house.
Refinancing a mortgage to a lower interest rate can make sense for some homeowners. So too can taking out a home equity loan against the value you’ve built up, perhaps to finance a kitchen remodel or pay Junior’s college tuition. What doesn’t make sense is losing your home because you fall for home equity loan and refinancing scams such as loan flipping and equity stripping. Although scam artists can be very convincing, homeowners who know what to look out for are less likely to become victims.
Loan flipping is a scam targeted at homeowners looking to get money back when they refinance a mortgage. This is often referred to as a cash-out refi. Scammers take advantage of this desire to tap the equity in a home to pay for things the homeowner couldn’t otherwise afford.
Equity stripping can occur in several ways, but at its heart is a scam artist who gains ownership of your home, borrows against it or sells it, pockets the proceeds, and disappears. You’re often left with a hefty mortgage balance and no place to live.
Watch out for unsolicited offers to refinance from companies claiming government affiliations. In particular, don’t be fooled by the use of official-sounding acronyms like “TARP” or official-looking website addresses. Scammers use these to gain your trust. Once they do, they’ll likely try to charge you for access to government assistance. Worse, they might extract enough personal information to commit identity theft.
New disclosure rules make spotting scams easier
Many unscrupulous lenders have relied on confusing paperwork to dupe borrowers into paying excessive upfront fees on loans. Others would pull last-minute rate switches at closing. Still others would disguise prepayment penalties, which can prove costly if you ever try to refinance again or retire a loan early.
Sunday, January 17 2010
EVANSVILLE - Many people are opening their hearts and wallets to help those in need in Haiti, but the FBI wants everyone to be careful who they give their money to. Officials said past tragedies and natural disasters have prompted scams.
The FBI provided this list of things to look for before making a donation:
• Do not respond to any unsolicited (spam) incoming e-mails, including clicking links contained within those messages.
Officials ask that anyone who gets such an e-mail or may have been a victim of this kind of scam to notify the Internet Crime Compliant Center at www.ic3.gov.
The IC3 is a joint effort between the FBI, the National White Collar Crime Center and the Bureau of Justice Assistance to report and alert authorities of online scams.