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In order to avoid the mortgage frauds, and in order to avoid becoming a victim of one such fraud programs, it is wise of you to become aware of the different situations, where you can get scammed. You can get scammed while taking out a mortgage, while trying to buy a home, while trying to sell a home or when trying to get a loan modification done on your mortgage, or if you are trying to refinance your property.

Mortgage scam situations

There are different situations under which you can get scammed, and some of these are:

1. Predatory lending – This mainly happens with the senior citizens, or the individuals having low income, or problems with regards to bad credit. The predatory lenders in general, charge exorbitant fees and high interest rates. This can in the long run result in loss of the home.
2. Equity skimming – This is the situation in which an investor takes out the mortgage, only through falsification of the credit and the income documents of another buyer. After the closing, that buyer in question signs over the property to the investor, simply through a quit claim deed. Thus, this means that the investor isn’t required to make any form of mortgage payments or pay any rents.
3. Foreclosure rescue – The fraudsters target those homeowners who are facing foreclosure. They offer foreclosure prevention services to such homeowners, as they seem to be the soft target, who is desperate to save the home from foreclosure. However, the actual situation is like, rather than helping your through the process of preventing foreclosure, the scammer simply runs away with your money, as thy in general charge upfront fees.
4. Property flipping: Property flipping though is a legal procedure, this process can become a scam program too. It happens when there happens any kind of false appraisal, with regards to the property.

Other than the above, some of the common examples put forward by the National Consumers League are the likes of:

1. Refinance fraud – This happens when you as the victim is going to sign over the ownership of your house, under the notion that you are signing over the documents so as to obtain a new loan with better terms and conditions.
2. Upfront Fee Scam – This is the situation in which the scammer promises that he is going to negotiate with the lender or the bank against an upfront fee, so that you can pay down the mortgage. However, this fraudster actually runs away with your money.
3. Lease-back or repurchase scams – A con artist promises to pay down the dues on the mortgage and then lease the house back to the victim. However, there is one condition and this is that the consumer will be required to sign over the deed on the home. The scammer as a result will have the upper hand and thus, get to raise the rent, sell off the house, or get the equity.

So, these are some of the situations in which you can get scammed, while trying to modify the loan, or sell or buy a house, and so on.