For business people, commercial real estate provides a significant opportunity for investment and growth. However, the commercial real estate mortgage space is wrought with fraudsters, often leading to disputes that can jeopardize both financial stability and reputation.
Whether you are an investor or property owner, knowing how you can detect and avoid potential scams is crucial to protecting your investments and achieving long-term success in the real estate market.
Steps to prevent mortgage scams
Here are several steps to help you avoid falling victim to mortgage scams:
- Reject unsolicited offers: Be cautious of unsolicited mortgage offers that come through emails, phone calls or mail. Always verify the legitimacy of the offer through independent research before proceeding.
- Choose reputable professionals: Work with mortgage professionals who have a solid reputation. Check their credentials, reviews and any professional affiliations. Reliable professionals will have verifiable track records and should be willing to provide references.
- Verify documents: Carefully examine all documents related to the mortgage transaction. Look for inconsistencies or unusual clauses, and make sure all terms are clearly defined.
- Investigate suspicions: If something feels off or too good to be true, trust your instincts. Ask for additional documentation, clarification or seek a second opinion. Scammers often rely on confusion and pressure to push through fraudulent deals.
- Avoid up-front fees: Be wary of anyone asking for fees before providing services. Legitimate mortgage companies typically deduct fees from the loan amount or charge them at closing. Up-front fee requests are a common red flag for scams.
- Dismiss false guarantees: Be cautious of companies that promise guaranteed loan modifications or other too-good-to-be-true outcomes. Legitimate companies do not offer guarantees because each situation is unique and subject to various factors.
If you suspect any fraudulent activity or dubious dealings, seeking legal guidance can help you address the issue effectively and resolve any potential disputes.