moving house

Protect Yourself Against Housing Scams

Follow these guidelines to protect yourself against housing scams. There are scammers that attempt to take advantage of people through fraudulent practices.

Avoid Moving Fraud
While most moving companies are reputable businesses that do quality work, there are some that attempt to take advantage of clients through fraudulent practices. Follow these guidelines to protect yourself against moving fraud:

* Get a written estimate from several movers. Some companies quote a low price to get a contract–and later ask for more money before they remove your belongings from their truck.
* Make sure the mover has insurance and is licensed by the proper authority.
* For moves from one state to another, a U.S. Department of Transportation (DOT) number is issued by the Federal Motor Carrier Safety Administration (FMCSA). You can search for a registered mover through the FMCSA.
* For moves within a state, requirements vary. Check with your state, county or local consumer affairs agency or your state attorney general.
* Check the mover’s record. You can find out the mover’s complaint history with local consumer advocacy organizations, such as the Better Business Bureau.

File a Complaint
* If you have a dispute with a moving company, you should file a complaint with the Federal Motor Carrier Safety Administration (FMCSA).
Note: Moving company complaints handled by the FMCSA must cross state lines, but can be reported at any time.

*If you have a complaint involving an intrastate move (a move within the boundaries of a state), contact your state or local regulatory authority.

Further Information
Protect Your Move can help you make informed decisions when hiring a mover to protect yourself against moving fraud.

Foreclosure Scams
Dishonest companies or individuals sometimes target homeowners who are struggling to meet their mortgage commitment or are anxious to sell their homes. Scam operators like this promise to help you keep your home or sell your home without having to go into foreclosure, for a fee. However, they rarely deliver on what they promised.

These scam operators find potential victims in several ways:
* Advertise online and in local publications
* Distribute flyers
* Contact people whose homes appear in the foreclosure notices (they can easily find these notices online or in a local newspaper)
* Target specific religious or ethnic groups

Common Foreclosure Scams
There are several types of foreclosure scams, but some scam activities or offers are common. Be cautious if the company:
* Offers to negotiate with your lender
* Advises that they can stop foreclosure by “helping” you file for bankruptcy
* Asks you to sign over the title to your house to them and make smaller rental payments to them until you can afford to buy the house back later
* Promises to act as an intermediary between you and your mortgage lender to refinance your loan
* Instructs you to make payments directly to them instead of the lender
* Claims that they are affiliated with government mortgage modification programs (keep in mind that legitimate, government approved programs do not charge fees to participate in them)
* Encourages you to sign fake foreclosure rescue documents
* Claims that they can perform a forensic mortgage loan audit to help you hold onto your home

File a Complaint
If you need to report a foreclosure scam, you may file a complaint by contacting the Federal Trade Commission (FTC). If the scam involves bankruptcy, contact a local U.S Trustee office.

Predatory Loans
Most mortgage professionals are trustworthy and provide a valuable service, expanding access to capital for previously underserved borrowers to buy or refinance their homes. But dishonest or “predatory” lenders do exist and engage in practices that increase the chances of borrowers losing their homes to foreclosure. For information about loan fraud and advice to prevent it, refer to the information below.

What Is Predatory Lending?
Predatory lenders, appraisers, mortgage brokers and home improvement contractors could use any of these tactics to take away your home or investments:
* Sell properties for much more than they are worth using false appraisals.
* Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
* Knowingly lend more money than a borrower can afford to repay.
* Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
* Charge fees for unnecessary or nonexistent products and services.

Avoid Predatory Loans by Being a Smart Consumer
To avoid becoming a victim of predatory lending or loan fraud, you need to understand the home buying process and be a smart consumer.

*Before you buy a home, attend a homeownership education course offered by a U.S. Department of Housing and Urban Development (HUD)-approved, non-profit counseling agency.
* Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.
* Get information about the prices of other homes in the neighborhood. Don’t be fooled into paying too much.
* Hire a qualified and licensed home inspector to carefully inspect the property before you are obligated to buy. Determine whether you or the seller will be responsible for paying for the repairs.
* Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.

If you believe you have been a victim of predatory lending practices, you can find a list of federal, state, and local resources at the HUD Office of Housing Counseling.

For more information, visit

Photo: David B. Gleason