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Beware of Hijacked Mortgage Payments

By
Real Estate Agent with RE/MAX Real Estate Consultants CA DRE #01147426

I saw this article the other day and I wanted to pass this on. There seems to be a rise of con artists sending letters telling borrowers they should begin sending their mortgage payments to a fictitious company that has begun servicing their loans. By the time borrowers find out they've been had, they're out one or possibly two payments. Here’s how the scam works!

By LewSichelman June 5, 2011 Reporting fromWashington—

A simple scam aimed at hijacking just one or two mortgage payments from unwary homeowners is making the rounds once again.

The scheme works like this: Con artists send letters telling borrowers that they should begin sending their payments to a fictitious company that has assumed the management of their loans. By the time borrowers who fall for the fake transfer find out they've been had, they're out one or possibly two payments.

That's not much in the greater scheme of things. Lenders and borrowers are being fleeced out of billions in much more elaborate ruses. But if you are an owner who falls for the letter, a couple of house payments can put a serious dent in your pocketbook.

The ploy works because most borrowers don't know the rules when it comes to the transfer of mortgage-servicing rights. Under the law, the current servicer — the company that administers your mortgage on behalf of the loan's owner — is required to send you a goodbye letter notifying you that as of such-and-such a date, your payment should be sent to a new company.

A week or so later, the law says you should receive a second letter, this one a welcome missive from the new servicer telling you what your payment is and the breakdown among principal, interest and escrow. This package also is likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes so you can make your payments.

Both letters should include your loan number. If they don't or if the information included in one doesn't match what's in the other, you should call your original servicer to find out what's up. If you receive only one letter, alarm bells should ring. But even if everything seems fine, it would be wise to call the first company's toll-free number just to be sure.

The maneuver "works for maybe two months" because it takes that long for borrowers to realize they've been had, saidBeckyWalzak, an expert in loan-quality assurance.

When the real servicer calls to tell the borrower the first payment hasn't been received, Walzak explained, the borrower reports that he did indeed send a check, and the two parties usually let it go at that. But when the borrower gets a second call informing him that the payment is still missing or that the next month's payment hasn't been received either, the now-worried borrower tells the servicer about the letter he received a month or two earlier, and the trick is exposed.

"It works for maybe two months before it is discovered," Walzak said. "But if the bad guys are any good, they've taken in thousands of payments from thousands of people. They cash them, and they move on to the next batch of borrowers."

*****

This is one you’ll probably want to “pass on” to others. Let your family and friends know the importance or checking things out before sending checks anywhere. Call your lender BEFORE you get caught in this scam, not AFTER you have been notified they never received your mortgage payment.

Click here for more on Common Loan Modification Scams

You should also know that advance fees for loan modifications now are prohibited.

IMPORTANT: If you or someone you know is interested in buying or selling a home in the Palm Desert Area, try searching properties on the same Desert Area MLS Realtor’s use, or give me a call….or visit my website at Palm Springs Homes and Estates. I will be happy to give you or your referral my “red carpet service.” After the sale, I will send you a $50 Gift Certificatetowards dinner in a fabulous Palm Springs Area Restaurant so you can celebrate!

Brought to You By Your Favorite Realtor,

Nancy Hankin

Comments (2)

Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Unbelievable ! What will these snakes think of next ????????!!!!!!!!!!!!!

Jun 18, 2011 01:59 AM
Nancy Hankin
RE/MAX Real Estate Consultants - Palm Springs, CA
Michael: Thanks for your comment. Unfortunately, there are a lot of snakes out there. There always have been, and there always will be. It's our job to spot them and then alert others what they are up to. Once we all do this, a few of them will hopefully slither away.
Jun 18, 2011 05:18 AM