Every week it seems that there is a new scam or hacks out there just preying on consumers regardless if you are simply trying to update your Microsoft account or you've closed on a home loan. If you have refinanced recently or you are considering applying for a home loan or have recently closed on a home loan, it is imperative to be aware of this type of scam that may have been right after closing.
Once you sign all of the closing documents at the title, escrow, or real estate company, those documents are publicly filed in the deed is recorded. The downside is that a lot of these records are public knowledge and while confidential information still remains confidential, scammers can find out just enough to try and pull one over on you.
A couple of days after your transaction closes or even before it closes, you may get a phone call from someone claiming they are from your title, escrow, or even your mortgage company. They may ask to verify certain information, potentially confidential or personal information and because homeowners and homebuyers have been inundated with identification verification and calls from their lender, they may not think twice about handing over any additional information. If you choose to give them your Social Security number, information on your address, mother's maiden name or birth date, you could potentially give the wrong person access to your identity and your money.
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Some scammers will even pose as a new lender telling you that they've purchased your existing loan and are now taking over the payments. Without a lot of research or digging, you may blindly send them your first mortgage payment. This happens to quite a few consumers. Several months down the line the actual lender calls to find out why they have not made their mortgage payment. When the consumer claims that they have, only then do they find out they've been sending their payment to the wrong company.
Even if it's not something is cut and dry as sending your house payment or mortgage payment to the wrong person, they could get just enough information to pose an identity theft threat, clean out your bank accounts, or even open other accounts in your name.
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So how can you protect yourself during the home loan or refinance process?
If you get any phone calls, even during the refinance or home buying process, clarify who you are speaking with. Make sure you get a phone number and say that you will call them back with the information. Then call the lender you know you are working with, your loan officer, title company, or even your real estate agent and ask if they've called you asking for this information. Most lenders will not call you directly and ask for specific information unless it's in writing, on the purchase and sale contract, or through your real estate agent if this is a new home loan.
Too many homeowners, especially first-time homeowners, blindly give their information over because they just don't understand the process. There are a lot of parties involved in a purchase and sale transaction and many homebuyers simply get overwhelmed or frustrated with how many people call them for details, verification, and information, however, we cannot get lax on giving out our personal info. The last thing you would want is for your lender to foreclose on you even though you think you've been sending in your mortgage payments.
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As a side note, many loans are immediately sold after closing so it's not uncommon for you to set up a home loan with one mortgage company only to have another one within a few weeks mail you information that they have purchased your home loan and are taking over the payments. Although this is not uncommon, it is still a red flag to be aware of. Call your real estate agent or the first loan officer you worked with and verify that this is actually what's happening. You want to make sure that where you were sending your mortgage payment is the right company that actually holds the title to your home. It's okay to get inquisitive and a little gun shy, because this is thousands of dollars we're talking about; once you send that payment to the wrong source, you may never see it again, so it's important to verify where your money's going, when, and why.