🚨 Mortgage Scams Are Rising in 2026 — How to Protect Yourself From Predatory Lending 🏠

🔒 Mortgage Fraud Warning Signs Every Homebuyer Must Know (And How to Avoid Costly Scams) 💰

Mortgage Scams Are Rising — Here’s How to Protect Yourself

Mortgage fraud and predatory lending are on the rise, especially during periods of higher interest rates, housing shortages, and economic uncertainty. First-time buyers, self-employed borrowers, seniors, and distressed homeowners are often the primary targets.

If a mortgage offer feels rushed, unusually cheap, or “too easy,” that’s usually the first red flag.

This guide explains the most common mortgage scams, how they work, and—most importantly—how to protect yourself before signing anything.

The Most Common Mortgage Scams to Watch For

1. Fake Loan Offers & Impersonation Scams

Scammers pose as lenders, brokers, or even credit unions like BECU, using look-alike emails, fake websites, or spoofed phone numbers.

Red Flags:

• Requests for wire transfers or gift cards

• Email domains that don’t match the lender’s official site

• Guarantees of approval without documentation

2. Foreclosure Rescue Scams

Homeowners facing financial distress are promised “instant relief” or foreclosure avoidance—for a fee.

How It Works:

• Upfront payment required

• Pressure to sign over title or deed

• No written explanation of services

3. Predatory Lending Practices

These loans are technically legal—but intentionally harmful.

Warning Signs:

• Excessive fees and junk charges

• Balloon payments hidden in fine print

• Adjustable rates marketed as “fixed”

• Steering borrowers into worse loans than they qualify for

4. Equity Stripping Schemes

Common among seniors and long-time homeowners with significant equity.

The Trap:

• Encouraged to refinance repeatedly

• Fees erode home equity

• Loan terms worsen with each transaction

How to Protect Yourself From Mortgage Fraud

✔ Verify Licensing
Always confirm your loan officer and brokerage are properly licensed at the state and federal level.

✔ Never Pay Upfront Fees
Legitimate lenders do not require advance payments to “lock” or “approve” loans.

✔ Demand Written Disclosures
Loan Estimates and Closing Disclosures must be provided and reviewed—no exceptions.

✔ Slow the Process Down
Scammers rely on urgency. Real professionals welcome questions and review time.

✔ Work With a Fiduciary-Minded Broker
A true mortgage advisor structures loans around long-term financial health—not commissions.

Why Education Is Your Best Defense

Mortgage fraud thrives on confusion. The more you understand how lending works, the harder you are to exploit. That’s why transparent education—not pressure—is the cornerstone of responsible mortgage brokerage.

If something doesn’t feel right, it probably isn’t.

Final Thought

Protecting your home means protecting your future. The right mortgage strategy builds wealth; the wrong one can quietly destroy it.

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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory