If your looking at refinancing here within the next few months you may want to watch out for this scam. I recently came across this scam on the FBI’s website and wanted to update you real quick on the situation.
How This Mortgage Scam Works
In this particular case people would asked to invest a large sum of money, usually around $50,000 or so by either refinancing or buying a home at an inflated price.
What the fake lender would do at this point is tell you not to worry about the high mortgage payment because the fake lending company would pay your payments for you in about 5 to 7 years.
How would they do this?
With the so called interest they earned off of your initial $50,000 investment with this fake lending company. This way you and the fake lender will own equal interest in the home. To top it off the home owner would also have to pay an administrative fee of around $5,000.
At this point the fake lending company claimed they would invest your money in particular investments like automated teller machines to flat screen TVs.
If you have seen this type program going on in your neighborhood you may think this sounds to good to be true and in fact these companies have gone to great lengths to make their operations seem even more legit by hosting these events at lavish hotels in New York and even in Beverly Hills, California.
The Current Situation On This Scam
You will be happy to know that one company has already been busted for doing this scam, called Metro Dream Homes. They were caught doing the same exact thing I just described above. However, I am afraid their are still some of these fake lenders out there.
These fake lenders may be doing things a little different than how I described it but the fact is their will be more scams like this to come.
If you would like to keep on top of these scams you can do that by easily signing up to my RSS and you will receive content like this from me on an ongoing basis.
Till Then,
Chris
This post was recently featured on The Money Hacks Carnival by Strechy Dollar.
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