7 TIPS for Avoiding Mortgage Scams

You’ve heard the radio ads buzzing and seen the banners pop up on the Internet: “Refinance!” “Low Rates!” “We’ll help you out of foreclosure!” It may sound like a great deal, but we’ve found people are getting scammed out of big bucks. If you’re in a mortgage-paying bind, read these tips before you sign on the dotted line or send anyone money.

1. I’m looking to refinance and need help. How can I tell right away if it’s a scam?

Scam artists know people who are in dire straits are vulnerable — and are likely to be lured in by ads with problem-solving promises. Listen for tempting pitch lines like: “Been turned down for a home loan? We’re guaranteed to help;” “We have a 96% success rate;” or “We can save your house.” Experts say if you bite on those phony promises, you’ll be lured into financial disaster.

2. What if I hear a tempting offer like that and I just want to check it out?

If we haven’t scared you away by now, the biggest red flag is any person or firm who claims they can modify your loan or save you from foreclosure — and asks for money up front. Run. It’s flat out illegal for company to demand a fee in advance. If it’s a legit re-fi or loan modification, your costs will be due at closing time, just like your original loan.

3. Have you really heard of someone getting ripped off? How much money are we talking about?

Oh yes! One of our viewers heard an ad for a company promising to slash mortgage payments. He called and was told they had “people working inside his mortgage company and they might reduce his monthly payment by 35%.” Then they said, “Just send us $1200 to get things started.” The guy did. They took his money and ran.

4. Are there any legit places that can help me with a tricky re-fi or save my house that’s in foreclosure?

Sure. The feds know it can be complicated, so Uncle Sam set up a couple of websites to turn for legit, free help. These and only these sites are the official places you should go: www.makinghomeaffordable.gov and www.hopenow.com

5. Oh, I saw some other websites that looked similar to those in an email I got!

Don’t do it! Don’t go there! The Feds are issuing alerts warning that criminals are making copycat websites. Don’t be fooled. They’re out to swipe your identity or pocket your hard earned money.

6. What if I’ve been turned down for a loan modification and a company offers to give me a second opinion?

Never pay for a second opinion if you’ve been turned down for a loan modification. That’s a scam. Some criminals also convince you they can “handle your mortgage” for you, so just send them your monthly payment instead of the bank. Guess where that money goes? Straight into their pockets — and your problems get even worse.

7. What should I do if I already got scammed by one of these companies or found one that seems suspicious?

If you live in Massachusetts, Attorney General Martha Coakley wants to hear from you. Her office has already filed complaints against three private companies in the past few months, each fraudulently offering to help get new loans. You can file a complaint online by clicking here. The Federal Trade Commission has also cracked down on these con artists and takes consumer complaints: www.ftc.gov

Award-winning investigative reporter Hank Phillippi Ryan is on the air at Boston’s NBC affiliate where she has broken big stories for the past 22 years. She has won 24 Emmys as well as dozens of other regional, national and international honors for her work. (www.hankphillippiryan.com). Mary Schwager is a journalist with more than 16 years of experience and is the investigative producer at 7 News. She’s won more than two dozen awards for investigative, consumer and feature reporting and writing, including nine Emmy Awards, seven Edward R. Murrow Awards and three Associated Press honors. She was also a state licensed detective and performed criminal investigations on behalf of the Wisconsin Public Defender’s Office. Find more of Mary’s articles at Examiner.com. Ryan and Schwager can be contacted at hryan@whdh.com and mschwager@whdh.com.