As America's economic and housing woes continue, so do the numerous scams facing homeowners and renters alike.
"It's absolutely horrendous right now," says Erin Angell Collins, a spokesperson for NeighborWorks, a housing advocacy group that runs loanscamalert.org.
"Housing scams are a growing problem because the longer folks are unemployed, the more financial difficulties they face. Unfortunately, that makes them ripe for scammers of all kinds."
To avoid being victimized, here are four mortgage and housing scams you must be aware of:
1. The "cloned" listing scam
Since most homeowners advertise on the Multiple Listing Service, thieves take advantage of MLS data to run the "cloned" listing scam.
Here's how it works:
A crook sees a house listed on the MLS. He copies or "clones" the information, re-posting it on a free site like Craigslist. But the con artist typically offers the home as a rental, way below market rates to quickly attract attention. The con artist then convinces someone to wire them money, usually by professing to be working out of town. In the end, the would-be renter loses a few thousand dollars.
"The way to avoid this scam is simple: Never wire money, sight unseen, to somebody you don't even know," says Michael Schaffer, founder of CheckYourLandlord.com, a tenant protection service.
2. The foreclosure-as-rental scam
Even meeting someone in person, however, won't guard against more sophisticated housing schemes.
Take the "foreclosure-as-rental scam," in which fraudsters find a home that is vacant--something relatively easy given the foreclosure crisis. The thieves then break into a foreclosed house, change the locks, and illegally rent the property.
"The scammer will meet with prospective tenants at the home, then 'rent' the house to five different individuals or families. They'll also take the security deposit or first and last months' rent from each person," Schaffer says.
When the move-in date arrives, people realized they've been duped and the swindler is nowhere to be found.
That's where a service like CheckYourLandlord.com comes in handy. For a small fee, it checks who legally owns a property. "If it's a foreclosure or a bank-owned property, we're going to find out about it. And our customer will know this is a scam and they shouldn't be renting that property," Schaffer says.
3. The government help scam
Scammers targeting homeowners in distress will often "claim some affiliation with the government " or falsely purport to be part of the "Obama plan," says Colleen Hernandez, CEO of the Homeownership Preservation Foundation, an independent non-profit that runs the national Homeowner's HOPE Hotline at 888-995-HOPE.
"We get 500 calls a week from people who've been ripped off," Hernandez says, noting that shady individuals can be very persuasive when fleecing homeowners facing foreclosure.
"Con artists do two very effective things," she says. "First, they make a 'guarantee'--like a guarantee to lower your payment. Then they imply that the non-profits who are legitimately trying to help can't 'guarantee' anything."
"They say: 'You get what you pay for' or 'Yes, we charge an upfront fee. But it's only $3,000, and it's going to save your house,'" Hernandez adds. Under federal law, it's illegal to charge upfront fees for mortgage help.
4. The mass joinder scam
It's music to a struggling homeowner's ears: a lawyer comes along asserting that the borrower's mortgage was fraudulent and that the individual has the "right" to join a class against lawsuit against a bank.
Of course, the attorney wants an upfront fee to represent the unsuspecting homeowner--who ultimately has no legitimate claim and just winds up losing money.
The Better Business Bureau has issued a warning about such scams, but they nonetheless continue.
In California, the attorney general is suing a "ring" of lawyers for bilking more than 2,500 homeowners out of millions of dollars. The lawyers allegedly used misleading advertising and telemarketing practices to convince desperate homeowners that they could sue mortgage lenders and stop foreclosure.
What's next, refinance scams?
The next frontier of scams is anyone's guess. But Collins says she's "very concerned about the prospect of refinancing scams."
With mortgage rates so low, many people would love to refinance their loans. But due to stricter lending guidelines, relatively few borrowers qualify.
Enter the opportunity for con men.
Collins worries that unscrupulous operators may start preying upon cash-strapped homeowners who've not been able to modify their loans. These homeowners may see refinancing into today's mortgage rates as the next-best alternative.
So Collins is warning consumers now: "Don't ever do business with a person or company who 'guarantees' they can refinance your mortgage. If they say that, you know it's a scam."
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Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, television and radio personality, and the author of numerous books, including the New York Times bestseller "Zero Debt: The Ultimate Guide to Financial Freedom." A former Wall Street Journal reporter for CNBC, Lynnette has appeared on such national TV programs as The Oprah Winfrey Show, Dr. Phil, The Today Show and Good Morning America. She can frequently be seen as a guest commentator on CNN, MSNBC, ABC and FOX Business Network. Follow Lynnette on Twitter @themoneycoach or visit her free financial advice blog at AskTheMoneyCoach.com.