Even though the real estate market in Texas is doing relatively well, the condition of the national housing market has caused scam activity to spike across the country. These schemes are designed to make the perpetrators rich and leave someone else, maybe you, holding the bag.
Scams can range from simple solicitations to file your homestead exemption for a $40 fee (the homestead-exemption process is free in Texas) to mortgage fraud and equity stripping that can reach into the millions of dollars.
Sly, smart and opportunistic, these scam artists frequently prey on people who find themselves in desperate situations. Although everyone’s potentially vulnerable, common targets include the recently unemployed, disabled citizens, non-English speakers, those on a fixed income, or people who just aren’t well-schooled in financial matters.
These are not necessarily small operations being planned in dark rooms. Some schemes are multi-layered, complex cons that involve legitimate-sounding companies and official documents… all with empty promises of relief, financial gain or a "good deal."
Two common scams are aimed at people moving from one home to another. The first involves an artificially low estimate from the moving company. Then, on moving day, the company revises the estimate to a much higher price. At that point, you have little choice. Everything is packed and ready and there’s a timetable to meet.
The second involves a moving company’s refusal to unload consumers’ property unless they agree to pay the bill, which inexplicably grew while their possessions were on the truck.
You should know four things about avoiding moving scams:
• Get a written estimate from a reputable and insured moving company
• By law, a moving company must deliver your property for no more than 10 percent above a non-binding estimate
• You are not required to pay more than the amount quoted on a binding estimate
• Movers must bill you for any additional charges within 30 days.
Home improvement is big business, but watch your back. The Better Business Bureau warns that you should be wary of any contractor who:
• Will not provide references
• Requires full payment up front or in cash
• Asks you to get permits
These are not necessarily signs of a scam, but one or more of them should certainly raise your suspicion level.
If you fall behind on your mortgage payments, the first thing you should do is contact your lender. It does not benefit a financial institution to foreclose on your home.
You may hear from someone claiming to be a foreclosure specialist or a mortgage consultant. Be careful. Some are scam artists… and they’re knowledgeable and smooth. They offer to save your credit or pay your mortgage for you, then they attempt to convince you to transfer your home’s title or deed to them or someone else.
Once that happens, you may find yourself as a renter in a home you formerly owned, with no means to discover that the “rescuer” or his partners are not making payments. When the loan default inevitably comes, you are evicted and have lost all your equity. In certain circumstances, you may even end up with the foreclosure on your credit history.
If you are behind on your payments, there is free help available. You can check HUD.gov, MakingHome Affordable.gov, and talk with your Texas Realtor® for resources to assist you.
Don’t be a victim – Mortgage fraud, equity stripping, equity flipping, bait-and-switch schemes – the list continues. Remember, if it seems too good to be true, it probably is.
If you think you have fallen prey to some kind of fraud, contact the FTC, as well the Texas Attorney General.
For your real estate needs, contact RE/MAX Genesis at 830-833-2000.