Some real estate scams are easy to spot while other schemes use sophisticated methods to defraud people of their hard-earned money. Unfortunately, the digital era is making it easier for fraudsters to steal money from potential renters and homebuyers. However, people can easily protect themselves from fraud by following a few simple steps.
Avoiding Escrow Fraud
When potential renters and home buyers receive an email from a third party claiming to represent a title company, but the email is from a free account, alarm bells should go off. Most title companies and lawyers do not use free email accounts. The best thing to do in this situation is to delete the email and contact the title company or escrow agents to see if they did send an email, especially if the email contains new wiring instructions for funds to close.
Predatory lenders can persuade unsuspecting homeowners to refinance their mortgages multiple times. Scammers charge outrageous fees and closing costs each time they convince homeowners to refinance, and they often fail to mention the new terms will have higher monthly payments because of larger loan balances.
Many seniors are vulnerable to mortgage flipping, especially those with significant amounts of equity in their homes. The scammers will convince seniors they can find them a better loan at a lower rate, and they also convince them they will have access to a large amount of equity. However, higher fees and a new, much larger loan balance eliminates most of the home’s equity and significantly increases the monthly payment (if there was one, to begin with).
Rental fraud is not as uncommon as many people think. People scammed by rental fraud have lost millions of dollars over the past several years. In today’s digital era, many scammers will post homes, condos or other structures for rent on social media platforms and sites like Craigslist.
The fraudsters will then ask for an upfront cash deposit to view the rental. However, the “owner/landlord” actually has no connection to the property, and the rental listing was a ruse to steal the deposit. Experts suggest potential renters should immediately be skeptical of any listing where an upfront cash deposit is required to view the property.
This article was originally published on JasonCohenPittsburgh.net