Protecting Yourself From Mortgage Scams

Many of us have heard horror stories, either on the news or from people we know, about consumers being victimized by unscrupulous mortgage brokers. The vast majority of people who work in the industry are not only honest, but sincerely interested in the welfare of their clients as well. That is why so many Americans choose to shop for their mortgage loan through a broker. However, as with any financial transaction, it is important to have a pro-active approach to not being the victim of a “scam”. Not overly difficult to protect yourself, rather the act of safeguarding oneself against fraud simply requires taking a few commonsense precautions.

First of all, do not let the mortgage broker sell themselves to you – you should come to them, not the other way around. Be suspicious of phone solicitations or personalized offers you receive in the mail. Ask yourself why a reputable company would need to purchase lists of names in order to solicit business, when most mortgage brokers and lenders of good standing rely on more traditional means to advertise their products. It could be because the company is looking for people who fit a certain profile, those who have been turned down for a credit card, for example.- and are subsequently easier to victimize.

Be a confident and proactive consumer regardless of your financial situation and credit history. You deserve to be treated fairly and given clear explanations of anything you are asked to agree to. Insist that any broker you do business with be licensed in the appropriate state. Ask them if they are a member of any industry group, such as the National Association of Mortgage Brokers. Do not just take their word for it, ask to see proof.