VA Loan Scams & Fraud Precautions
How to spot a VA loan scams and fraud attempts. One of the best home loans available today, are the Veterans Affairs loans, known as VA loans. These loans are secured by the department of United States Department of Veterans Affairs helping military personnel to be able to be homeowners with little to no money down payments. There are millions of military personnel who use these VA mortgage loans to finance their home all over the country.
Unfortunately there are cases where financial crimes are committed by people who takes advantage of the military personnel. In this short review you can read more about VA loan scams and fraud attempts, VA foreclosure traps worth to avoid.
Early Stages VA Loan Mistakes
Some of the VA loan mistakes begin at the early stages of the ‘mortgage shopping’ when the Vernen is still trying to figure how to get a VA home loan mortgage for buying a home. Because the VA loans are the best home loans available today, they allow getting zero down mortgages, and getting a loan even with bad credit where other options are simply not available.
Because of these unique terms, many are desperate to be able to qualify for VA mortgage loans, and that is where the problems begin. When a veteran gets advise from people and mortgage brokers who do not know enough about VA loans. These people are not ‘scammers’ yet they do have websites that build high expectation and promises to be able to get VA loan qualifications to any veterans or military personnel. They may not be truly an expert or experienced in such processes, in some cases they are not familiar with all the documentation needed and all the military ‘fine print’ and legal aspects of what they fill in the VA loan application.
Avoiding VA loans trouble, first tip would be working only with experienced VA loan brokers and only through the Department of Veterans Affairs local representatives and VA state centers.
It’s Not A Scam It’s Just An Unprofessional Advice
Some borrowers do a crucial mistake and listen to advice of people who VA loans is not their profession. If you are a military personnel and inquire about a loan, some people down the road may advise you to report False documentation. Dishonest advisers might encourage VA loan borrowers to report a higher yearly income or try to claim a different duration in certain military units or fabricate the kind of military service you were engaged in. Veteran Affairs have seen too many attempts to bypass the strict guidelines of the VA mortgage eligibility by filling false information in order to get approved.
Any such applications with incorrect data or dishonest reporting, will cause the application to be immediately disapproved. Since these applications will be scanned by experienced personnel and software checking and validating everything, these ‘mistakes’ if found are dealt with very seriously as VA fraud attempts by the borrower!
The VA Cross Payments Scam
One scam which is easy to fall into, and is easy to carry out for the scammers, is sending a very impressive letter to the VA mortgage borrower, announcing that the loan was purchased from the original lender and now belongs to some other lender. The scammers make sure the envelope they send seems very official, with all the right logos and government acronyms, the paper is a thick expensive looking paper, adding mortgage coupons with all the CEO CFO signatures assuring the content of the claim
The ‘new lender’ sends the new bank accounts for the borrower to continue their monthly payments, they ‘thank’ the borrower for following through and cooperation.
The veteran or their spouse or who ever is the scam’s victim changes the monthly payment and transfers the money to the scammers bank account. In the meanwhile the original lender sees that one payment was missed, and sends their letter to the VA mortgage borrower. Until the scam is detected a few month may pass, the borrowers was scammed by thousands of dollars and now has their credit report damaged by not being 100% current on the mortgage payments.
To avoid such VA mortgage scam, the veteran borrower needs to verify any suspicious requests they receive by email or by letter announcing ‘changes’. The best thing wold be to bring the letter to the original lender and verify with them any strange or ordinary request.
The Low Ball VA Mortgage Scam
The ‘low ball’ name for this scam comes from the marketing ‘low ball’ pitch, which is when the sales person asks for a small request which is difficult not to cooperate with if the person agrees there will be a second request, which is a higher risk request, which most people will cooperate with because they are already engaged and committed.
For example, at the mall and someone approaches and says: “Hi my name is Mike, I am from Green.com, can I ask you just few questions?” Since questions are low risk, people usually agree to answer. The person will ask “What do you think about global warming?” and then will follow with “Do you think enough is done to save our planet?” If you answer that global warming is a risk, and not enough is done to stop global warming, the person may ask you straight forward: “Thank you, would you be kind to donate as little as $5 to help us fight for a greener planet?” Most people would donate!
Take note that the VA mortgage scammers may send first a letter with a small or regular announcements, such as change in a phone number or the contact email, and request the borrower to make an initial call or email. Once the borrowers calls or sends an email, the scammers will reply politely and keep in touch with the borrower for small minor issues and ‘updates’. Soon the borrower is deep in their trap, because when the ‘scam letter’ arrives, or a higher risk offer is placed the borrowers are believing they are contacted by their original lender and not by the scammers.
Always be doughtful, double check with your lender before signing any documents.
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