Buying a home is one of the most significant events and investments that we tend to make in our lifetimes. Now, imagine that someone wants to defraud you throughout the process and leave you’re cashless and houseless.
The main problem lies in the idea that criminals are getting more creative when it comes to targeting people and consumers, which can lead to severe problems with their victims.
If you wish to learn how to avoid real estate scams, you should click here for additional information.
According to the FBI’s data, more than eleven thousand victims reported real estate fraud in the last year alone, which is more than $150 million.
At the same time, people tend to get embarrassed to file complaints, which means that scammers can go undetected and repeat their fraud.
People do not realize dangers that happen all around, especially in information and digital era in which we use the internet for almost everything from banking to buying. They do not understand that using public internet connections for handling personal business through websites and email.
They directly become targets of fraud because these lines and connections are not secure, and they do not know how to protect themselves against a data breach.
Stay with us to learn about the most common real estate scams so that you can prevent it from happening to you.
- Escrow Wire
The most common fraud is a random way of reaching people from all across the globe. Maybe you already had experience through text, phone call, or email from someone from escrow or Title Company.
They tend to send instructions on how to wire the funds. Everything works perfectly because they create fake sites that appear similar to the lending company that you are working with, which means that you will not suspect that something shady is going on.
At the same time, scammers use spoofing tactics to create email addresses, websites, and phone numbers that appear familiar, but without a single letter, for example, so you will not be able to notice it at first glance.
The idea is to follow the instructions, which is the path towards becoming a victim. The scammers will withdraw the funds from the offshore account and enjoy in next cocktail waiting for the next victim.
However, it is challenging for you to retrieve it afterward. The best way to protect yourself is to thoroughly read the original documents that you got from the lender call the phone numbers, double-check and verify that wiring instructions are relevant.
Do not send money using online banking accounts, or open on text or email links without verifying the instructions with someone you already met beforehand.
You should always confirm the escrow account before you decide to wire funds. The easiest way to do it is to call a settlement agent to double-check and verify the transfer of funds as soon as you get the notice.
Watch this video: https://www.youtube.com/watch?v=_LUSTCrX3vI and you will find out about most common real estate frauds.
2. Loan Flipping
This particular fraud requires a predatory lender that will find ways to persuade you to refinance the mortgage while borrowing more money as a result. They tend to charge high points and fees after each transaction, which will bring you a higher loan than before.
At the same time, the chances are high that you will not be able to repay the new deal. The frequent victims are seniors with memory impairment because they do not realize the problem until it is too late.
Lenders tend to convince them that they can find them better loans for refinancing old debt, which is something that most people approve, especially if they are in fluctuating financial situations.
When it comes to protection, you should avoid handling essential financial decisions in case you have cognitive issues. This is especially important for home equity, among other things. If you completed the refinancing, it is not a good thing to get another one as soon as possible.
Lenders are always trying to reach the next victim, and as soon as you notice that someone offers you a loan at your doorstep or café, it means that you should avoid it altogether. The best and safest approach to avoid real estate scams is to choose certified and popular lenders or banks.
Since they need to provide you closing disclosures and loan estimates with all fees, you should review every single work properly before you sign anything.