8 Florida VA Mortgage Loan Scams to Watch Out For
If you're a veteran, service member, or military spouse living in Florida and looking to buy a home, you may be considering a VA mortgage loan. VA loans are a great option for many people, offering low interest rates, flexible terms, and no down payment requirements.
However, the rise in popularity of VA loans, unfortunately, also comes with increased scams targeting veterans and their families. Scammers use a variety of tactics to try and trick people into paying upfront fees, redirecting mortgage payments, or signing over their property titles, among other things.
In this blog post, we'll go over some of the most common scams targeting Florida VA mortgage loan borrowers and offer tips on how to avoid them so that you can enjoy the benefits of your VA loan without falling victim to fraudulent practices.
Table of Contents
- Scam 1 - Upfront Fees Scam
- Scam 2 - Payment Redirection Scam
- Scam 3 - Money Order or Gift Card Payment Scam
- Scam 4 - Loan Servicer Impersonation Scam
- Scam 5 - Loan Modification Scam
- Scam 6 - Title Transfer Scam
- Scam 7 - Pressure to Sign Papers
- Scam 8 - Unusual Offers or Requests
- What to do if you are a victim of a VA loan scam
Scam 1 - Upfront Fees Scam
One of the most common scams targeting Florida VA mortgage loan borrowers is the upfront fees scam.
Scammers will contact you and ask you to pay a fee upfront before receiving any services. They may claim that the fee is for things like processing your loan application, helping you secure a lower interest rate, or improving your credit score.
It's important to know that legitimate VA mortgage lenders do not require upfront fees for their services. If someone is asking you to pay a fee before you can receive any assistance, it's likely a scam. Once you pay the fee, the scammer may disappear and you'll be out the money you paid.
To avoid falling victim to this scam, be wary of any lender or individual who asks for upfront fees. Always research before working with a lender, and ensure they have a good reputation in the industry, like MakeFloridaYourHome.
Additionally, you can contact the VA for help finding a reputable lender or consult a trusted financial advisor or attorney to ensure you are making an informed decision.
Scam 2 - Payment Redirection Scam
Another scam that Florida VA mortgage loan borrowers should be aware of is the payment redirection scam. In this type of scam, a scammer will contact you, posing as your loan servicer, and ask you to cancel your mortgage payment and resend the funds elsewhere.
The scammer may claim that there was an error with your payment or that they need to update their payment processing system. They may ask you to send the payment via a wire transfer or other non-traditional payment method.
If you fall victim to this scam, you could lose the money you intended to pay towards your mortgage. Additionally, your mortgage payment may be considered late, which could result in late fees or even a negative impact on your credit score.
To avoid this scam, always make your mortgage payments directly to your loan servicer using the payment method specified in your loan agreement.
If you receive a request to redirect your payment, be wary and contact your loan servicer directly to confirm the legitimacy of the request before taking any action.
Never send money to an unverified or unsolicited party, especially via non-traditional payment methods such as wire transfers or gift cards.
Scam 3 - Money Order or Gift Card Payment Scam
Another common scam that targets Florida VA mortgage loan borrowers is the money order or gift card payment scam.
Scammers will try to convince you to make your mortgage payment via money order or gift cards, rather than through your usual payment methods, such as online bill pay or automatic bank drafts. They may even tell you that this is the only way to avoid foreclosure or other financial penalties.
It's important to remember that legitimate mortgage servicers will never ask you to make payments via money order or gift cards. These payment methods are often associated with scams because they are difficult to trace and can be easily used by scammers to steal your money.
If someone tries to pressure you into making payments via money order or gift card, it's a red flag that they may be trying to scam you. Instead, always make your mortgage payments through your usual payment methods, such as online bill pay or automatic bank drafts.
If you have any concerns or questions about your payment options, contact your mortgage servicer directly at the phone number listed on your mortgage statement.
Scam 4 - Loan Servicer Impersonation Scam
In this type of scam, fraudsters will contact you pretending to be representatives of your loan servicer. They may use official-sounding language and ask for sensitive information such as your social security number, bank account information, or mortgage details.
They may also request that you make payments through an untraceable method or pay a fee upfront to receive their services.
It's important to note that legitimate loan servicers will never ask for your personal information or request payments through an untraceable method. If you receive a call or email from someone claiming to be your loan servicer, do not give out any sensitive information until you have verified their identity.
To avoid this scam, always be cautious of unsolicited calls or emails and never provide sensitive information unless you have confirmed the legitimacy of the request.
If you receive a suspicious call or email, hang up or delete it immediately and contact your loan servicer directly to verify the request. You can find the contact information for your loan servicer on your monthly mortgage statement.
Scam 5 - Loan Modification Scam
Another common scam that Florida VA mortgage loan borrowers should be aware of is the loan modification scam. In this type of scam, a scammer will contact you and claim they can guarantee to get you a loan modification or stop foreclosure.
The scammer may claim they have a special relationship with your loan servicer or the VA and can offer you a loan modification that will reduce your monthly payments or interest rate. They may also ask for upfront fees or personal information to process the loan modification.
It's important to know that legitimate loan modifications are not guaranteed, and you should never pay upfront fees for loan modification services. Scammers may take your money and disappear, leaving you in an even worse financial situation.
To avoid falling victim to this scam, be wary of any lender or individual who guarantees a loan modification or asks for upfront fees. Always research before working with a lender or loan modification company, and ensure they have a good reputation in the industry.
Additionally, you can contact the VA for help finding a reputable loan modification company or consult a trusted financial advisor or attorney to ensure you are making an informed decision.
Scam 6 - Title Transfer Scam
The title transfer scam is another fraudulent tactic that Florida VA mortgage loan borrowers need to watch out for.
In this type of scam, a scammer may contact you and ask you to sign over the title to your property, claiming that they can help you avoid foreclosure or reduce your mortgage payments.
If you fall for this scam, you'll lose ownership of your property, and the scammer may attempt to sell your home or take out a loan against your property. You may also face legal consequences for signing over your property without fully understanding the implications.
To avoid this scam, never sign over the title to your property to an unverified or unsolicited party.
Always consult with a trusted financial advisor or attorney before making any major financial decisions, and be wary of any individual or lender who pressures you to sign documents you haven't had a chance to read thoroughly or that you don't understand.
Scam 7 - Pressure to Sign Papers
The pressure to sign papers scam is a common tactic used by scammers to trick Florida VA mortgage loan borrowers into signing documents that may not be in their best interest.
In this type of scam, a scammer may contact you and pressure you to sign papers you haven't had a chance to read thoroughly or that you don't understand.
These papers may include loan documents, modification agreements, or other financial contracts with hidden fees or unfavorable terms.
Scammers may use high-pressure tactics, such as threatening legal action or foreclosure, to get you to sign the papers quickly without fully understanding your agreement.
To avoid falling victim to this scam, always take your time to read and understand any financial documents before signing them.
Don't be pressured into signing anything without consulting a trusted financial advisor or attorney. Be wary of any lender or individual who uses high-pressure tactics or threatens legal action to get you to sign documents quickly.
Remember, it's always better to be safe than sorry when signing financial documents, especially regarding your Florida VA mortgage loan.
Scam 8 - Unusual Offers or Requests
Another common scam that Florida VA mortgage loan borrowers must watch out for is unusual offers or requests. Scammers may contact you with offers that seem too good to be true or make unusual requests that don't make sense in the context of your mortgage loan.
These unusual offers or requests may include things like asking you to pay fees upfront before receiving any services, telling you to cancel your mortgage payment and resend the funds elsewhere, or asking you to make your mortgage payment via money order or gift cards.
They may also try to convince you that your home is facing foreclosure or that you must sign over the property title.
To avoid this scam, be wary of any offers or requests that seem unusual or don't make sense in the context of your mortgage loan.
Always verify the identity and credentials of any lender or individual who contacts you, and never give out personal information to someone who contacts you out of the blue.
If you're unsure whether an offer or request is legitimate, it's always safer to hang up and call your loan servicer directly at the number on your mortgage statement.
Remember, scammers rely on tricking you into making impulsive decisions, so always take your time to think through any financial decisions and consult with a trusted advisor before taking action.
What to do if you are a victim of a VA loan scam?
If you suspect that you have been targeted by a VA loan scam, it is important to take immediate action to protect yourself. Here are some steps that you can take:
Contact your loan servicer - If you have received a suspicious phone call or email, the first step is to contact your loan servicer directly. Verify with them whether the call or email was legitimate or not. Do not provide any personal or financial information until you have confirmed that the request is genuine.
Report the scam - If you believe that you have been scammed, you should report the incident to the Federal Trade Commission (FTC) and your state Attorney General's office. You can also report the scam to the VA directly. Reporting the incident will help authorities take action against the scammers and may also help prevent others from falling victim to the same scam.
Review your credit report - It is a good idea to review your credit report to check for any unauthorized accounts or charges. You can get a free copy of your credit report from each of the three major credit bureaus once a year by visiting annualcreditreport.com.
Monitor your accounts - Keep an eye on your bank and credit card accounts for any unauthorized transactions. If you notice any suspicious activity, report it to your bank or credit card company immediately.
- Be vigilant - Remain vigilant and cautious when it comes to unsolicited phone calls, emails, and mailers. Be skeptical of any requests for personal or financial information, especially if they ask you to pay upfront fees or make payments via money order or gift card.
In conclusion, scams are a sad reality that can cause financial and emotional distress to individuals and families.
We hope this blog has helped you identify and avoid VA home loan scams. Remember to never give out personal information to anyone you're unsure of and always contact your loan servicer directly to verify any requests or offers.
At MakeFloridaYourHome, we pride ourselves on being a reputable VA loan lender and are committed to ensuring our customers receive trustworthy and reliable service.
If you're in need of a VA home loan, please don't hesitate to contact us. Our experienced team is here to help you every step of the way.
Protect yourself from VA home loan scams. MakeFloridaYourHome is a trusted VA loan lender. Contact us today.
With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.
About Author - Phil Ganz
Phil Ganz has over 20+ years of experience in the residential financing space. With over a billion dollars of funded loans, Phil helps homebuyers configure the perfect mortgage plan. Whether it's your first home, a complex multiple-property purchase, or anything in between, Phil has the experience to help you achieve your goals.