How to Spot Second Mortgage Scams

Second mortgage scams are always making the rounds. But you don't have to be a victim of this type of fraud. There are certain telltale signs to look for. If you feel the least bit leery, stop all action toward finishing a second mortgage loan and consult a lawyer.

Instructions

1. Ignore any solicitations for mortgage loans, whether first or second, that come to you via email. Unsolicited communications, or spam, is often the first method of contact that scammers use.

2. Give no information over the telephone to unsolicited callers who want to help you set up a second mortgage on your home so you can pay bills or remodel. A sympathetic ear can often lure people into falling for scams. Legitimate banks wait for you to contact them to do business.

3. Take out a second mortgage only if you absolutely need one. Many offers tout easy-to-repay financing, but the fine print shows anything but that. Unscrupulous second mortgage lenders often have expensive hidden fees that you know nothing about unless you read every little detail of the fine print.

4. Beware of offers to finance a second mortgage that come with offers to contract the labor and supplies for a home renovation. Often the contractor and mortgage lender are working together. Both make sure to get their money up front at inflated rates. Often their customer gets nothing in return except mortgage payments.

5. Sign only completed original documents. Often scam artists hand their customers a blank loan document and tell them to sign it first. Later they fill in whatever amounts they want. If you sign such a document, you are liable for the debt.

6. Be wary of any business that asks for your personal information such as date of birth and Social Security number. Some people who run second mortgage scams also sell this information to identity thieves as a sideline business.