Last month a survey by the AARP indicated that veterans are a frequent target of refinancing scams. 16% of veterans have lost money to fraud, compared to 8% of the general public. The VA has issued a warning to veterans about common refinancing scams. We’ll help you identify some of the common features of refinancing scams so that you can protect yourself from criminals.
How do refinancing scams work?
The concept of refinancing scams is simple enough: The scammers work to convince you that they are a real lender and entice you to do business with them by offering an unrealistically good service. Once they have your trust, they take your financial information, drain whatever money they can, and promptly vanish.
Right up until the moment that they disappear, refinancing scams are meant to seem like an interaction with a normal lender, albeit one with an unusually good offering.
Oftentimes these scammers attempt to prey on those who are desperate for a good deal on a refinance. Veterans who are struggling should be especially cautious when it comes to VA loan offers from unfamiliar parties.
Identifying refinancing scams
Many refinancing scams offer a variety of to-good-to-be-true benefits to veterans. While it is true that home loan and refinancing programs for veterans are quite generous (with low rates and often no down payment requirement), you should be suspicious if an offer includes:
- No waiting periods
- Thousands of dollars in cash back
- Skipped mortgage payments
- No out-of-pocket-costs
Extremely aggressive sales tactics should also be a red flag. Unsolicited offers should always be treated with suspicion. If you receive contact from a lender without having gone to a lender or private agency, be aware that this is highly unusual. This doesn’t mean that it’s a scam necessarily, but a good course of action is to contact the Department of Veterans Affairs directly and request advice.
When contacting the VA, be sure to use to research the number of the nearest VA center and call them directly. Do not use a number provided in third-party advertising, as this may be part of the scam.
Alternatively, you could contact your lender. They will be able to help you determine whether or not the offer is legitimate.
Want more information about VA refinancing in Redding? Concerned about illegitimate refinancing schemes? Megastar Financial is a trusted mortgage bank with 15 years of exceptional service to its customers. Contact our Redding branch for more information.