Home Business Scam Central

The Mortgage Scam

With interest rates at a thirty-year low many homeowners are scrambling to refinance their mortgages. Some of these loans are being resold to what is being termed a “predatory lender” and the homeowner becomes a victim of the Mortgage Scam.

What is a “predatory lender?” A predatory lender is a mortgage company that purchases loans from a reputable company and then conveniently loses one or more of your payments during the transition period. Their customer service is nonexistent and they refuse to accept items such as canceled checks or paid receipts as evidence of payment. First you receive harassing phone calls from a collection agency demanding payments that you have already made. Then you find yourself at the receiving end of a foreclosure notice and your home in danger of being sold at the courthouse door.

A typical story is that of Patricia Richards of Powder Springs, Ga. Her mortgage was sold to Fairbanks Capital Corporation. Fairbanks then claimed Patricia had not made several payments and proceeded to publish her home for foreclosure. Not only was she about to lose her home, her excellent credit rating was also at risk. Since Fairbanks and their attorneys would not respond to Patricia, she was forced to hire an attorney at her expense to resolve the issue. Fairbanks beat a hasty retreat without any apology. Based on the numerous reports, Fairbanks appears to be one of the major players in the predatory lending field. These reports can be accessed at many scam sites such as www.complaints.com and www.badbusinessbureau. Do a search for mortgage. As a result of this article I have been advised that there is a site dedicated especially to those who have been Fairbanks victims. This site can be found at

http://www.conti-fairbanks.com

These complaints also document other types of mortgage scams such as failing to post your payments in order to collect late fees, overcharging for taxes and insurance and fees for nonexistent “property inspections.” The disturbing part is that consumers are receiving little help from the state and federal agencies that are supposed to regulate the mortgage industry.

Therefore it is up to you to protect yourself from the clutches of a predatory lender. Deal with a reputable company that has a local office where you can make your payments and talk to a real person if there is a problem. Make all of your payments on time and by check. Be sure to keep a copy of all your bank statements. Automatic bank drafts are convenient and will prevent late fees but I advise against them because it will be impossible to reverse any other unwarranted fees. Respond promptly to any notices. Be alert to any charges that you do not understand. Confirm any contacts with customer service with a letter, certified mail return receipt is advisable. Most of us rely on a telephone call or email to compalin. These are often ignored and we later have no proof. A certified letter is a legal document admissible in court.

I am not a lawyer and cannot give legal advice. But I do know that predatory lenders prey on those who do not know their rights. If you do not know your rights you do not have any. The advice of an attorney may be required so consider purchasing a pre-paid legal plan prior to closing the loan. If you do have problems with the lender contact your state attorney general and file a formal complaint. Also be sure to notify the credit reporting agencies that there is a dispute so your credit will not be damaged.

Most of us assume that mortgage companies are interested in providing good customer service and will correct any mistakes. The fact is that even the most reputable company makes mistakes that can be difficult get corrected. When we encounter a predatory lender that deliberately participates in a mortgage scam, we are at their mercy unless we act promptly and take the proper precautions.

Bank Draft Scam Alert

We are receiving reports about the increased use of automatic bank drafts to separate unsuspecting home business owners from their assets. All a company needs to withdraw funds from your bank account is the bank's routing number and your account number. The use of electronic funds transfer has gained in popularity over the last few years. Many people now use this method to pay mortgage payments, utility bills, tution payments, and even contributions to their favorite charity. It is a convenient method to be sure that your bills are always paid on time so that you avoid those exorbitant late charges. However, some very uncharitable people have discovered that it is remarkably easy for them to use this same method to withdraw funds from YOUR checking account.

Usually the scam starts with a very persuasive telemarketer with an offer for a credit card or other "fantastic" deal. After a few minutes you are convinced and agree to place an order or accept your "fabulous" prize. Then you are asked to read them the numbers from the bottom of your check. Once they have this information they can withdraw funds from your checking account without your signature or permission. You will not know that this money is now GONE until you reconcile your bank statement at the end of the month.

Another way of obtaining your account information is from a check that you have sent to a company that appears legitimate. The problem is that any employee with access to the records or mail can copy your check and pass along the information to an accomplice.

How to Avoid Being Scammed

Many calls that you receive from telemarketers are legitimate and legal. Some even offer a product or service that will be of great value to you or your family. Never order from a telemarketer unless they are willing to provide the name, address, and phone number of the company they represent. If they avoid any of these questions, hang up immediately. No is the most powerful word in the English language. Never fall for a sales pitch that includes "limited offer" or "you MUST sign up now." Any business interested in having you as a customer will provide you with their information and give you a reasonable time to decide.

Once you have this information then turn on your computer and check for references at the Better Home Business Bureau and for complaints at Complaints.Com. If no adverse information appears then call back and place your order. They will be glad to hear from you and you will have had the time to make an informed decision. However, it is still not time to abandon all caution. Always use a credit card and insist that you not be charged until shipment. Some companies, like the recent "as seen on TV" Abenergizer scam, will keep promising shipment until your time limit to contest a charge expires.

I've Been Ripped Off

If you discover a fradulent withdrawal from your account, go to the bank immediately. Do Not Call! Phone calls or emails do not count and the money will keep disappearing from your pocketbook. Fill out a report (keep a copy) and insist that your account be credited. Do not let them tell you that you must call the company that withdrew the money. This is the bank's way of avoiding a loss. If the bank does not cooperate you must close your account and find another bank. Some banks will transfer charges from one account to another so it is important to close all of your accounts. You should also notify the Home Business Scam Center ,your State Attorney General and the FTC.

This article may be reprinted in its entirety, including the resource box, with the author's permission.

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