Consumer Fraud Alert – Tips for avoiding VA home loan scams
July 14, 2021 / Source: CFPB
Consumer Fraud Alert - Tips for avoiding VA home loan scams
By Patrick Brick, Carolyn Hahn, and Alberto Planas – JUL 14, 2021
Many servicemembers, veterans, and military spouses have been receiving fraudulent calls and mailers from companies who claim to be affiliated with the government, the Department of Veterans Affairs (VA), or their home loan servicer. These calls or mailers often try to sway you to refinance your home, agree to a loan modification, or pay your loan via purchased money orders. They may also try to convince you that your home is facing foreclosure.
Be wary of any individual or lender that contacts you and:
- Asks you to pay fees upfront before receiving any services
- Tells you to cancel your mortgage payment and resend the funds elsewhere
- Asks you to make your mortgage payment via money order or gift cards
- Tells you to make mortgage payments to someone other than your current loan servicer
- Asks you to stop making mortgage payments altogether
- Represents that they’re calling on behalf of the VA or another agency of the U.S. government
- Guarantees to get you a loan modification or stop the foreclosure process
- Asks you to sign over the title to your property
- Pressures you to sign papers you haven't had a chance to read thoroughly or that you don't understand
- Or other unusual offers or requests
Never give out personal information to a lender or servicer who contacts you out of the blue. Scammers can spoof phone numbers, so you can’t rely on caller identification. If you’re unsure, it’s always safer to hang up and call your loan servicer directly at the number on your mortgage statement.
What to do if you spot a scam
If you are a victim of or spot a scam, you should first file a complaint with your State Attorney General’s Office . You should also report it to the FTC at ftc.gov/complaint .
What the CFPB is doing to prevent VA home loan deception and fraud
In response to concerns raised by the VA about potentially unlawful advertising in the mortgage lending market, the CFPB recently conducted a sweep of investigations of multiple mortgage companies that used deceptive mailers to advertise VA-guaranteed mortgages. More than $4.4 million was obtained in civil money penalties as a result of this sweep. These investigations reflect a commitment to enforcing the laws to ensure the financial marketplace is fair and consumers are protected from deceptive practices, including servicemembers, veterans, and surviving spouses whom VA-guaranteed mortgages are designed to benefit.
If you are having trouble paying your mortgage
If you can’t pay your mortgage or are worried about missing a mortgage payment, you have options. The first thing to do is call your mortgage servicer. Learn the steps to take, relief options, and places to go to get help with your mortgage.
Use our checklist for more information on how to avoid foreclosure.
You can also visit the VA website or call a VA Regional Loan Center at 1-877-872-3702 for more information.