Watch Out for this Mortgage Scam

If it isn't bad enough that homeowners and potential buyers are already leary of the real estate and mortgage industry, here comes along con artists pulling a fast one on them to rob them of monthly payments. These con artists send letters to borrowers telling them that they need to start sending payments to a new company that has now assumed the management of their loan. They then pocket this money, which typically ends up being at least two months worth of payments by the time the borrower realized what has happened. The number one way to prevent this from happening is helping the borrowers to understand the legalities of mortgage-servicing rights. When the current servicing company will no longer be administering the borrower's loan, they are required to send them a goodbye letter with a date stating when their services will end. After this has happened, the borrower will receive a welcome letter from the new servicer telling them their payment breakdown. Both of these letters must include the borrower's loan number to provide accurate and relevant information. If the loan number is not presented on both of the letters, this is a warning sign and should be addressed by calling the current servicer. Even if everything seems fine, in order to prevent any faulty practices, it is a good idea for the borrower to call their current servicer and just double check on the situation.