Old Scam Targets Homeowners Who've Refinanced

refinance scamListen up, mortgagees: Did you hear the one about the new company that's going to service your refinanced loan? It's just a step away from the Nigerian royal who needs your help and is willing to give you half his fortune for just a few thousand dollars of your nest egg.

In a mortgage-related scam currently making the rounds, con artists have been sending letters to borrowers instructing them to send their mortgage payments to their new loan servicer. But the new company doesn't exist -- and by the time borrowers realize they've been snookered, they're behind in their payments by a month or two.

As columnist Lew Sichelman warns, it's an old scam that's seeing new action, as crooks prey on folks who've recently refinanced and may be dealing with unfamiliar loan-servicing centers. And with eight weeks of consistently dropping interest rates, the refi pipeline is overflowing with ripe new victims.

To avoid getting fleeced, you should be aware that there is a process that kicks in whenever there's a change in mortgage servicing rights. Lenders can switch mortgage servicing companies whenever they chose, but the old loan servicer must contact the borrower by mail to inform them of the change.

And then there is a second notice, this time from the new loan servicer which also must reach out and let the borrower know where to send their payments as of an appointed date. This second "welcome" letter should state the payment amount and provide a breakdown for principal, interest and escrow if there is one. It may even include a few payment coupons.

Both letters should have your loan number -- and you should check that it is correct on both.

Unless you get two letters, you should just keep paying who you've been paying. Otherwise, we know of a Nigerian royal who would like to speak with you.

For more on mortgages and related topics see these AOL Real Estate guides:

More on AOL Real Estate:
Find out how to
calculate mortgage payments.
Find
homes for sale in your area.
Find
foreclosures in your area.
Get
property tax help from our experts.

Add a Comment

*0 / 3000 Character Maximum