Home Scams Resource
Authored By: GeorgiaLegalAid.org
Home Purchase Scams
If you are thinking of buying a home, shop the right way. Don't become a victim of home purchase scams, which can turn your dream of home ownership into a nightmare. These traps steal your hard-earned money and leave you and your family out on the street.
Scams to watch out for:
1) rent-to-own or lease with an option to buy,
2) contract for deed or land contract, and
3) seller-financed wraparound mortgages.
Learn more about home purchase scams and how to protect yourself by reading the Avoid Home Purchase Scams! brochure
MLS to drop in New/Updated/Finalized version of "Avoiding Home Purchase Scams" when received
Home Builder Fraud
All homebuyers buying a new home should beware of home builder fraud. Some housing builders cut corners when building houses or entire neighborhoods. Once the house is bought, it is often very hard to make the builder or the warranty insurance company make the needed repairs. Then you get stuck with the bill and a house worth much less than the sale price. You should always hire an inspector to make sure the house is in good condition and to check if repairs should be made, whether the house is new or previously owned.
Are you facing high property taxes? Struggling to pay your mortgage? At risk of losing your home? If your goal is to keep your home, learn about your options.
Have you applied for all property tax exemptions for which you may be eligible?
- Learn about property tax exemptions, and how and when to apply for them HERE - MLS to drop in when received.
Have you challenged the property tax valuation?
- Learn how to appeal your property tax assessment HERE - MLS to drop in when received.
Have you applied for a loan modification?
- Learn about tips when you are in default on your mortgage loan, and about loan modification and mortgage payment assistance programs by reading the Tips for Homeowners in Default or Facing Foreclosure brochure. MLS to drop in New/Updated/Finalized version of "Tips for Homeowners in Default or Facing Foreclosure" when received
Do you have an adjustable rate mortgage coming due? Is your interest rate already too high? You may be able to refinance your mortgage using the FHASecure Program offered by the Federal Housing Administration
- Learn about FHASecure, who is eligible, and how far behind you can be on a mortgage to qualify by reading the Struggling to Pay Your Mortgage? brochure
Home Sale Scams
Are you a homeowner? Are you located in an area that has undergone significant development? Are you being pressured to sell your home, flooded with offers by mail, or annoying phone calls? Have you been approached about selling your home?
Beware: Investors who buy homes fast, as-is, will pay you far less than your home is worth!
Help is available! GET ADVICE BEFORE YOU SIGN ANYTHING!
- Learn more about home sale scams and how to protect yourself by reading the Recognizing and Avoiding Home Sale Scams brochure. MLS to drop in New/Updated/Finalized version of "Recognizing and Avoiding Home Sale Scams" when received
Con artists know that people facing foreclosure are often looking for help to keep their home. Here are tips on how to protect yourself from foreclosure scams!
- Read the Avoid Foreclosure Scams brochure
- Read the Recognizing Foreclosure Rescue Scams in English and Spanish brochure
- Read the Foreclosure Rescue Scams brochure by the National Consumer Law Center
- Read the 5 tips for Avoiding Foreclosure Scams brochure by The Federal Reserve Board
Home Loan Scams
This brochure by the National Consumer Law Center warns of abusive lenders trying to sell home owners a loan with payments that are too high which could result in losing your home at a foreclosure sale or spending all of your spare cash paying off a loan you didn't need or want.
Equity Theft and Title Conversion Scams
For information on figuring out the equity in your home, see the FAQs on Home Equity page.
Home improvement fraud is perhaps the most common scam. Be very careful if someone tries to sell you a new roof or other home repairs over the phone or by knocking on your door. Many of these contractors are crooks who will grossly overcharge you and tell you to go to a high-cost mortgage lender to pay for the repairs. The contractor pockets the loan proceeds and performs bad work or no work at all, and you're left paying off the mortgage loan for years to come.
Debt consolidation is another scam to steal your equity. This is when a mortgage broker or a mortgage lender will contact you and offer to pay off your debts with a single mortgage loan. Watch out – this single loan is almost always more expensive over the long run than all your old debts added up.
Loan flipping is a dangerous scam that a lot of times comes after one of the others. A short time after you take out a mortgage loan, your lender might contact you and offer to refinance your loan, promising to make the terms more affordable. However, the lender usually flips you into a new loan just as bad or even worse than the one before. The lender might flip you more than once, and each time you get charged new fees.
Foreclosure assistance fraud is a title conversion scam. This is when you are in default in your mortgage loan and facing foreclosure, and a crook comes to you and offers to lend you enough money to catch up the back payments and save your home. You sign the papers, believing that you are getting a loan. But the papers actually say that you are selling your house to the crook for the price of the loan! The crook gets the title to your house and you get evicted.
Home Repair Contractor Scams
- Be sure your contractor is good - know who you are hiring. Do not hire people who ring your doorbell and tell you your roof needs repair or your gutters need fixing. Get the names of at least three people who have used them and call them. Find out how long the job took and how good the work was.
- Don't use contractors who offer to do the job using material left over from another job.
- Don't use a contractor who tries to pressure you into making a decision.
- Find out what kind of insurance the contractor has. Hire people who have a up-to-date certificate of insurance.
- Never pay a large sum up front. Instead, negotiate a time table and payment schedule where you will pay the contractor as work is completed.
- Get it in writing-insist on a contract that lists the work to be done, the time it will take to be done, the materials to be used, the names of any subcontractors and the schedule of payments.
- Get the subcontractors to waive their right to put a lien on your home if the contractor doesn't pay them.
National Consumer Law Center
This resource by the National Consumer Law Center talks about what you should look out for and what your rights are when dealing with lenders.
This resource by the National Consumer Law Center talks about refinancing.
This resource talks about how to stay away from scam artists who use high pressure tactics to sell unneeded and overpriced contracts for "home improvements."
Home Repairs: How to Avoid Getting Ripped Off by Home Repair Contractors
Authored by: Atlanta Legal Aid Society Seniors Hotline, William Brennan
Home repair disputes can be difficult to resolve. It is far better to do some work on the front end to avoid problems down the road. The following are some tips you can use if you are concerned about making these decisions:
Be sure your contractor is reputable - know who you are hiring. Do not hire people who ring your doorbell and tell you your roof needs repair or your gutters need fixing. Get the names of at least 3 references for your contractor and call them. Find out how long the job took them and the quality of the work.
Don't use contractors who offer to do the job using material left over from another job.
Don't use a contractor who tries to pressure you into making a decision.
Find out what kind of insurance they have. Hire people who have a current certificate of insurance.
Never pay a large sum up front. Instead, negotiate a time table and payment schedule where you will pay the contractor as work is completed.
Get it in writing - insist on a contract that specifies the work to be done, the time it will be completed, the materials to be used, the names of any subcontractors and the schedule of payments.
Get the subcontractors to waive their right to put a lien on your home if the contractor doesn't pay them.
If you are 60 years old or older and have questions or concerns, call the toll-free Georgia Senior Legal Hotline and talk with an attorney at (888) 257-9519. Our program offers no cost legal advice to Georgia's Seniors.
Otherwise call Atlanta Legal Aid Society or Georgia Legal Services Program to see if you qualify for free legal help.
I believe that I am, or someone I know is, the victim of a housing scam. Who should I call?
Call a private lawyer, the Atlanta Legal Aid Society, or the Georgia Legal Services Program immediately.
Atlanta Legal Aid Society:
DeKalb (404) 377-0701
Home Defense Program (770) 648-4290
Clayton/South Fulton (404) 669-0233
Fulton (404) 524-5811
Gwinnett (678) 376-4545
Atlanta Bar Referral Service (404) 521-0777
Decatur/DeKalb Lawyer Referral Service (404) 370-0843
For Seniors, age 60 or older Senior Hotline (404) 657-9915 or toll free 1(888) 257-9519
For residents outside of the 5-county Metropolitan Atlanta Area, please dial Georgia Legal Services Program 1-800-498-9469
U.S. Department of Housing and Urban Development (HUD)
The New York Times
Consumer Financial Protection Bureau