Part four of five-part consumer alert series to help New Yorkers navigate housing scams
By the New York Department of State’s Division of Consumer Protection
For this week’s “Tuesday’s Tips,” the New York Department of State’s Division of Consumer Protection announced the release of a comprehensive guide with scam prevention tips for homeowners.
Homeownership evokes a feeling of pride and the start to long-term financial stability; it is also the biggest financial decision many people make. These tips aim to provide New York homeowners with the knowledge they need to help protect this significant investment.
The guide is part four of a five-part consumer alert series to help New Yorkers navigate housing scams, which are a continuously growing risk for consumers.
“Scammers are always looking for new ways to take advantage of consumers, and homeowners are often targeted for their personal information, money or property,” Secretary of State Robert J. Rodriguez said. “Whether you’re a new homeowner or you’ve owned your property for decades, it’s important to take all the necessary precautions to protect yourself from nefarious scammers, so you don’t lose out on thousands of dollars, or even worse, your home.”
Superintendent of the State Department of Financial Services Adrienne A. Harris said, "Scammers continue to become more sophisticated with ever-evolving tactics aimed at exploiting the dream of homeownership for their own gain. The information in this guide provides homeowners with an important defense against these scams, and the department stands ready to investigate and hold accountable those responsible.”
Below are tips to help homeowners protect their properties:
•Protect your property from deed theft and fraud. The deed is the legal document that proves who owns the home. Deed fraud happens when scammers either forge signatures or convince the homeowner to unknowingly sign paperwork that transfers the deed. Some red flags to look for include when a person:
√ Asks you to transfer your property rights to them.
√ Provides a guarantee or promised result. Legitimate organizations and individuals can only promise to work hard for you. They cannot guarantee results.
√ Requests an upfront fee to modify, refinance or reinstate your mortgage.
√ Pressures you to sign over the deed to your home or sign any paperwork that you haven't had a chance to read, and you don't fully understand.
Steps You Can Take to Prevent Deed Theft or Fraud
•Check out the NYS Homeowner Protection Program, which offers free housing counseling and legal assistance to homeowners.
•Monitor your deed. Ask your county clerks' office or the New York City Register's Office to see your property records if you suspect deed theft or fraud. Some cities and towns have systems to notify property owners when new documents are recorded on their property. New York City residents can sign up for the Notice of Recorded Document Program, which will automatically mail you a notification when a new document is recorded against your property.
Avoid fraudulent refinancing offers. Homeowners often look to refinance for lower interest rates to help ease financial pressures. Remember to shop around for the best loan and pay attention to potentially deceptive offers.
•Be wary of reduced rates that are significantly lower than market interest rates. This may be a sign of various hidden fees or even a bait-and-switch tactic.
•Confirm the identity of the refinancer. The Nationwide Mortgage Licensing System & Registry (NMLS) maintains a database of licensed mortgage brokers and loan originators.
•Ask to see everything in writing before you agree to the refinancing terms. According to the Federal Trade Commission, lenders must disclose the following key information to you:
√ Clearly outline the changes to your loan.
√ Clearly tell you the total fee the company will charge you for its services.
√ Warn you that you could lose your home – and damage your credit – if you stop paying your mortgage.
•Know your options if you fall behind on your mortgage. Unfortunately, during times of financial hardship homeowners are often targeted by scammers who prey on their desperation.
•Contact your lender, a certified housing counselor or the NYS Homeowner Protection Program for advice and available options if facing financial problems or foreclosure.
•Beware of anyone who contacts you with a solution to your financial problems. Never do business with anyone who calls you, sends you mail or knocks on your door with offers to help fix your foreclosure or default. Do not respond to advertisements and fliers making similar offers.
•Never pay up front for mortgage relief services. Be cautious of anyone that requests an upfront fee to help prevent a foreclosure. Mortgage relief scams often target homeowners facing foreclosure with promises to modify the loan in exchange for an upfront payment.
•The Home Equity Theft Prevention Act governs certain sales of homes that are in foreclosure or default. If you are planning to sell a home that is in foreclosure or default, you should be aware of your rights under the act, and know what to expect from a legitimate buyer.
•Know your rights. If you are facing foreclosure, review the Residential Foreclosure Actions Consumer Bill of Rights.
About the New York State Division of Consumer Protection
The New York State Division of Consumer Protection provides resources and education materials to consumers, as well as voluntary mediation services between consumers and businesses. The consumer assistance helpline (1-800-697-1220) is available from 8:30 a.m. to 4:30 p.m. weekdays, excluding state holidays. Consumer complaints can be filed at any time at www.dos.ny.gov/consumer-protection. For other consumer protection tips and consumer alerts, consumers can follow the New York Department of State on Facebook, Twitter and Instagram, and check in every Tuesday for more practical tips that educate and empower consumers on a variety of topics. Sign up to receive consumer alerts directly to an email or phone here.