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Online Mortgage Application Safety Guide
By Michael Wayland | May 8, 2008
It seems like a great idea, companies who will help you submit an application to mortgage lenders who are perfect for your situation. What could be wrong with that?
Plenty! Some lead generating companies will sell your information to dozens of companies over many months. Meaning you could be swamped with calls about your loan request, or worse, an ID thief may obtain your information, call you and receive all the information they look for to rob you and destroy your credit.
Performing a test sample of five such companies that allowed you to locate the “perfect” lender it was found, when the lenders called, much of the information they had on the prospective applicant was completely incorrect – including incorrect home value, property type and loan amount.
Nearly four months after the initial online application, phone calls with respect to the request where still being received. In total: 54 lenders called. This means the information was sold 54 times. There was no way of determining how many actually of these were actual lenders and how many were ID thieves?
Some of the mortgage lead portal sites do not notify consumers that they are collecting your information to provide to outside lenders, leading consumers to believe these sites are the mortgage company – until you’re blindsided by the phone calls.
Unfortunately, there are lending lead portals that require your social security number. Refusal to provide a SSN would prohibited you from submitting an application. The reputable sites that are out there generally will not ask for such confidential information.
This leads to the much more serious form of these type of sites: Mortgage Phishing…
Mortgage phishing is the way scam artists to try and get your personal information such as social security numbers, account numbers and dates of birth. Once this vital information is obtained they can wreck havoc on your credit and finances. Most mortgage phishing is in the form of emails.
Take for example this nice collection of emails we’ve received on a private email account of one of our staff members. We knew better than to respond and now you do too!
Email #1:
—– Original Message —–
From: Ted
Subject: extending loans simplified
Loan approval department is trying to contact you
You have been pre-qualified for a one-time program that will save you 35% off your current payment.
You could get up to $297,000 for as low as never.
For a no obligation consultation http://justluixdareal.com
To guaranteed low rate please respond asap
Email #2:
—– Original Message —–
From: Joesph Coker dudleycash@enufjeans.com
Subject: Refinance approved
Thank you for your loan request, which we received yesterday.
We’d like to inform you that we are accepting your application.
We are ready to give you a $272,000 loan (Approved refinance) for a low month payment. Approval process will take only 1 minute. Please visit the confirmation link below and fill-out our short 30 second form. http://glasseealthh.com
Email #3:
—– Original Message —–
From: Gretchen Pratt marcpigeon@thegolfsight.com
Subject: Once You have completed this expression of interest your information will be sent to our participating lenders
Thank you for your loan request, which we received yesterday.
We’d like to inform you that we are accepting your application.
We are ready to give you a $272,000 loan (Approved refinance) for a low month payment. Approval process will take only 1 minute. Please visit the confirmation link below and fill-out our short 30 second form. http://almodhealthh.com
Email #4:
Subject : Thanks, we are accepting your refinance loan request
From :Manuel Keyes ctxaires@52tips.com
Your credit history does not matter to us!
If you OWN real estate and want IMMEDIATE cash to spend ANY way you like, or simply want to LOWER your monthly payments by a third or more, here is our best deal we can offer you TONIGHT (hurry, this tender will expire THIS NIGHT):
$306,000+ loan
AND EVEN MORE: After further review, our lenders have set the lowest entire payment! Hurry, when our deal is gone, it is gone. Simply fill in this plain form… Do not worry about approval, your credit will not disqualify you!
http://milliaiemiilia.com/
These emails, and others like them, will take you to websites where private information is requested to “apply for the loan” or to “continue the mortgage application that you are already approved for”.
They promise the world in some of their emails:
- “Refinance all your debt and get thousands in cash in your hand at closing”
- “Borrow up to your home’s appraised value regardless your credit!”
- “Low 1% – 2% interest rate, even with bad credit!”
- “Already approved just complete the application and we’ll close in just a matter of days!”
Individuals in dire straits, weak credit or naive to the pariahs out there will take the bait and complete the application with hopes of getting out of their current situation.
Millions of emails for these mortgage scams are sent out every month. Statistically, it does not take a large response to make phishing a lucrative business. More than two-thirds of email spam is sent from outside the United States, making legal actions difficult.
Those doing the phishing use false emails and fraudulent websites, redirecting your information throughout different countries, creating a difficult if not impossible task for finding them and recovering your money. The websites they use are legitimate looking and often times are clones of well-known banks or lending institutions – even colors and logos can be identical. Hijacking trusted names gives the unsuspecting borrower a false sense of security.
Always remember: If you didn’t ask for it, something phishy is going on.
In efforts to rein in the issue, the Federal Trade Commission has sued mortgage loan spammers. In December 2004, the FTC reached a settlement with the principals of an online operation, 30 Minute Mortgage Inc., that had advertised 3.95% and 30-year mortgages, hoping to obtain sensitive information—including Social Security numbers—from consumers for resale. According to the FTC’s statement, “the settlements also bar the defendants from using or benefiting from personal information that was deceptively collected from consumers.”
A recent report at techweb.com indicates that Phishing scams are growing at a rate of 50% per month, but at any given time there are a greater amount of fraud Web sites on the Internet than there are Phishing Web sites. They went on to report that while the typical life span of a Phishing Web site is under 3 days, fraud Web sites tend to stick around longer (8.5 days) which allows them to get into search engines, offering them some degree of legitimacy.
What You Should Do if tempted by such an offer…
* Call the company (after completing a check through the yellow pages or a reverse lookup online). If there’s no phone number, STOP, it’s probably a scam.
* If there is no street address it’s probably not a legit company.
* If you do locate a live person or company, ask them to mail you the application. Do not fill out an application online.
* Don’t download any “application” or “program” they send with the email, it could contain spyware.
The most important thing you can do for any mortgage “scam”: Use Common Sense. Never give private information to anyone before checking them out first! Never give out private information during an online application unless you know it’s a reputable company.
And if you receive emails that appear to be deceiving such as those shown above, report them to the FTC and get these creeps shut down! http://www.ftc.gov/spam/
Topics: Articles, Buyer Beware, Consumer Help, Tips, Warning, protection
