Coronavirus scams are spreading nearly as fast as the virus itself. Beware of mortgage rescue scams.
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The U.S. Department of Housing and Urban Development’s recent decision to implement a 60-day moratorium on foreclosures and evictions for households with FHA-insured mortgages reduces the risk of a wave of foreclosures. But that hasn’t stopped con artists from trying to capitalize on distressed homeowners’ vulnerability, which would make their financial situations significantly worse.
Mortgage relief scams during the coronavirus pandemic can take many forms, from promising immediate relief from foreclosure or demanding cash for counseling services. Here’s a tip: help is free.
On Wednesday, the Federal Home Loan Mortgage Corporation, known as Freddie Mac, tweeted: “Our risk team recently learned of a scam where borrowers receive fraudulent calls from a Freddie Mac impostor offering low interest rates and other false promises. We simply do not do that.”
To stay on guard and avoid becoming drawn into a mortgage scam designed to steal money and sensitive information, follow these tips from Freddie Mac:
Be cautious with caller ID. Scammers can make any name or number appear from anywhere in the world.
Let it go to voicemail. If a call from an unknown number is important, the caller will leave a message.
Hang up. If it’s a robocall, don’t press any numbers. Just hang up.
No information. Never give out personal, financial or other sensitive information unless you have verified the caller as a legitimate source.
Be suspicious. Be wary of offers that sound too good to be true. For example, Freddie Mac will never reach out to offer a refinancing opportunity or new loan over the phone.
Report fraud. If you have been contacted by someone claiming to represent Freddie Mac or otherwise suspect fraud, report it to Freddie Mac.
The website states: “During times of distress, it is important to be on your guard against fraud schemes. If Freddie Mac owns your mortgage and you are a homeowner that has been affected directly or indirectly by COVID-19, mortgage relief options are available. Contact your loan servicer (the company listed on your mortgage statement) to discuss your options.”
The Federal National Mortgage Association, commonly known as Fannie Mae, also offers valuable tips for homeowners:
Beware of anyone who says they can save your home if you sign or transfer over the deed to your house.
Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
Don’t sign papers in exchange for a promise that someone else will pay off your mortgage.
Always be sure to read and understand all paperwork before signing to ensure that you are not unknowingly giving someone else ownership of your home.
Never submit your mortgage payments to anyone other than your mortgage company without your mortgage company’s approval.
Scammers might ask you to make your payments to them; however, they pocket your payments instead of sending them to the mortgage company.
Beware of anyone who says that you don’t need a real estate professional or title company when selling your home. You should always have a real estate professional, attorney or a title company help you with any transaction involving your home.
According to Experian, some criminals find potential victims by reviewing publicly available foreclosure notices. The consumer credit reporting company states: “In this type of mortgage fraud, scammers primarily contact homeowners by phone offering help if they can’t make payments or may be falling behind on their mortgage.”
Scammers often make promises of lower payments or making the payments for a homeowner. But they don’t actually make the mortgage payments, and you may end up going into foreclosure anyway. Also known as foreclosure scams or foreclosure rescue schemes, this type of fraud is common and can cost consumers a lot of money.
Before responding to any person or organization offering to save you from foreclosure, find out if the organization is approved by HUD. The safest sources of information and help are your mortgage company or a HUD-approved housing counselor.
In addition, avoid visiting suspicious informational websites that could be fake copies of common sites. Look for typographical errors in the domain name.
While some fee-based counselors are legitimate, counseling is available at no cost. Call 888-995-HOPE (4673) for free housing counseling. Housing counseling agencies approved by HUD can help homeowners negotiate with their lender or loan servicer.