When buying and selling a home, looking out for real estate scams is often last on many people’s list. They’re more worried about making sure the price is right, things go smoothly, and the whole process gets done quickly. However, scams do happen, and all homeowners need to be aware of them to protect themselves. Here are 3 real estate scams homeowners in Baltimore should be aware of:
ESCROW WIRE FRAUD
Everything looks good to go with your home purchase, and you get an email from the “title company” with instructions on where to wire the escrow money.
Unfortunately, the website you’re sent to appears to be real, but it isn’t. The scammers have set up a spoofed site to look exactly like the one run by your title company. The goal of this website is to collect your personal and financial information, using that to steal your money and your identity.
Once you’ve entered your banking information, the scammers move the money to an offshore account and live the high life with your money. And you have few options for retrieving it.
To protect yourself from escrow wire fraud, treat any communications with your title company with suspicion. Before clicking the links in an email, which can attempt to steal your personal information, or enter your financial information, call your title company directly and ask whether or not the email was sent to you by them.
A little extra time spent calling your title company can protect you from escrow wire fraud and other real estate scams.
Predatory lenders who convince homeowners to refinance their loans repeatedly are loan flipping, one of the most common real estate scams around.
These lenders talk homeowners into refinancing their loans multiple times, often with hefty fees, points, and other costs, which skyrockets the monthly payments. These payments quickly snowball to something the homeowner cannot afford, increasing the risk of default and foreclosure.
This scam frequently targets the elderly, especially those with memory impairment, as the predatory lender counts on the person’s inability to fully remember the details. These loans are usually couched as a way of helping the homeowner afford renovations and improvements necessary to age in place.
If a lender seeks you or a loved one out and offers a “refinance,” that’s typically the sign of a scam. Rather than going with someone who solicits your business, work only with lenders you approach yourself and whose reputation you know.
For those homeowners who have fallen on hard times and whose homes are at risk of foreclosure, real estate scams can be common.
Scammers gain access to records of homes in pre-foreclosure, swooping in and contacting the homeowners with promises of help to avoid foreclosure. These scammers offer their “help” with foreclosure relief in exchange for hefty up-front fees, often leaving the homeowner in worse financial shape than before.
Sometimes, these scammers pose as members of government agencies to gain credibility.
To help avoid this type of scam, work directly with your lender to see if you can put your loan in forbearance, or take other measures to help you avoid foreclosure. You also can seek out a HUD-accredited housing counselor on your own, who can help you work with your lender to find relief.
Again, it’s the safest course of action to distrust anyone who seeks you out without you requesting information in order to protect yourself from real estate scams.
Help Protecting You from Real Estate Scams
Unfortunately, real estate scams are becoming more common as scammers become more sophisticated in their methods. If you wonder if you’ve been the target of these or any other real estate scams in Baltimore, contact our office at (410) 276-7827!