Being a first-time homebuyer is exciting and scary at the same time. You’re thrilled to start this journey and move into your new place, but this is a new experience, so you might not know what to expect. Because of your unfamiliarity with the process, there’s the risk of getting caught in a mortgage scam.
The good news is that there are ways to recognize red flags and protect yourself from scammers.
Be Leery of Unsolicited Mortgage Offers
Be leery and cautious of anyone who contacts you with an unsolicited mortgage offer via phone, email or mail. The sender or caller may claim to be a mortgage company, yet they’re really a thief looking for their next victim.
They’ll use a variety of tactics to get your attention and gain your trust. They may entice you with guarantees of a low rate or zero down, and then persuade you to reveal your name, address and Social Security number.
This is a sneaky ploy to steal your identity. So never share your personal information with anyone over email or phone.
The person might go as far as saying you must pay a fee “right now” to take advantage of an offer. Don’t fall for this. In all likelihood, they’ll take your money and run.
Keep a Close Eye on Your Credit
Some dishonest people combine identity theft with mortgage fraud and go after your home’s equity.
They might use phishing tactics to initially get your personal information, such as sending an email link asking you to update your account information. The thief then orchestrates an elaborate scheme that involves rerouting email, physical mail, phone calls and even creating fake documents to apply for a home equity line of credit in your name.
Once they get approved for the line of credit, they withdraw the cash and leave you with the debt.
This isn’t just a financial nightmare, it’s also a credit nightmare. The home equity line of credit will appear on your credit report. So the longer this debt goes unnoticed and unpaid, the more damage it does to your credit score.
You can protect yourself, though, by regularly monitoring your credit report. Order copies of all three of your credit reports at least once a year from AnnualCreditReport.com. Additionally, sign up for credit monitoring. This way, if anyone opens a credit account in your name, you’ll receive a notification.
Be Aware of Wire Fraud Scams
Also, be on the lookout for mortgage wire fraud scams. This is when someone attempts to steal a buyer’s down payment and closing costs funds by hacking into their loan officer’s or title agent’s email.
Thieves look specifically for the names and emails of those who have upcoming closing dates. They then send fake emails to these borrowers with instructions on where to wire their settlement funds. Because these emails appear real, some borrowers fall victim to the scam and wire their money to the thieves.
To protect yourself, never respond to an email containing wire transfer instructions. Confirm the legitimacy of an email by contacting your lender or title company, using a phone number you’ve used for previous communications.
Mortgage scams can hurt your credit and your pocket, so it’s important that you know how to recognize dishonesty and fraudulent activity.
FirstBank Mortgage puts their customers first, and we’re committed to transparency and helping you find the right home loan program. To learn more, contact our experienced loan experts today.
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