Avoiding mortgage scams requires being alert, informed, and cautious — especially when dealing with large sums of money or personal information. Here are practical ways to protect yourself:
🧠 1. Educate Yourself About Common Mortgage Scams
Familiarize yourself with typical scams such as:
- Foreclosure rescue scams – fake companies claim they’ll “save” your home for an upfront fee.
- Loan modification scams – scammers offer to negotiate with your lender but take your money and disappear.
- Fake lenders or brokers – pretend to offer loans but steal your personal or financial details.
- Equity skimming – someone convinces you to transfer your deed and then rents or sells your home.
- Bait-and-switch scams – you’re promised one loan rate, but the terms change at closing.
🕵️ 2. Verify All Lenders and Brokers
- Work only with licensed lenders or mortgage brokers.
- In the U.S., check the NMLS Consumer Access website.
- In the U.K., confirm authorization with the Financial Conduct Authority (FCA).
- In Canada or Australia, check your provincial or state regulator.
- Avoid anyone who refuses to share a license number or pressures you to sign quickly.
💰 3. Be Wary of Upfront Fees
- Legitimate lenders usually don’t charge large upfront payments before processing your loan.
- Never wire money or pay in cryptocurrency to someone claiming to guarantee approval or lower rates.
📝 4. Read All Documents Carefully
- Don’t sign blank or incomplete forms.
- Make sure all loan terms match what you were promised (interest rate, fees, loan duration).
- Get independent legal advice before signing — a real lawyer can detect fraud quickly.
📞 5. Protect Your Personal Information
- Share your Social Security number, bank details, or ID copies only after confirming the company is legitimate.
- Scammers often use phishing emails, fake websites, or caller ID spoofing to steal information.
🚩 6. Watch for Red Flags
Be suspicious if someone:
- Promises “guaranteed approval” regardless of credit.
- Asks for payments via gift cards, wire transfer, or crypto.
- Tells you to stop communicating with your lender.
- Rushes or pressures you to sign documents immediately.
- Offers deals that sound “too good to be true.”
🏛️ 7. Report Suspicious Activity
If you think you’ve encountered a scam:
- U.S.: Report to the FTC or Consumer Financial Protection Bureau (CFPB).
- U.K.: Contact Action Fraud or the FCA.
- Canada: Report to the Canadian Anti-Fraud Centre.
- Australia: Contact Scamwatch (by ACCC).
