How to Steer Clear of Common Homeowner Scams  

Key takeaways: 

• Homeowner scams are common, with scammers looking to steal personal identification and banking information, and/or sell you products or services you don’t need.  
• Scammers may fraudulently represent themselves as employees of legitimate companies and service providers. 
• You can learn to protect yourself from scams by following six key steps. 

Owning your own home can be a wonderful experience, offering stability, freedom, the ability to generate equity and all the benefits that come with the pride of ownership. It also comes with the responsibility to maintain your home, pay property taxes and insurance, and sometimes, the need to identify and deal with scams.  

Scammers can target homeowners to steal personal information and to sell questionable, unscrupulous or even phony services. While this can happen to any homeowner at any time, many scams are triggered by title activity. Since a home equity agreement (HEA) is recorded on a title – and that information is public – many HEA customers find themselves on the receiving end of communications from both legitimate companies and scammers. 

Understanding how to identify and handle scams is critical if you want to be prepared and protect yourself. Here are some of the common scams homeowners may encounter. 

Mortgage protection insurance scams

A mortgage protection plan, or mortgage life insurance, is designed to pay off a mortgage in the event of a homeowner’s death. The insurance pays off the lender instead of the homeowner’s heirs, tying the amount to the balance on the mortgage. So, as the mortgage balance declines, so does the benefit.  

While mortgage protection insurance is a legitimate product, it often is not needed. But there is no shortage of aggressive vendors who will try to convince you otherwise. Some offers for mortgage protection insurance often look official and can be disguised to look like they come from your actual mortgage lender or even from Unlock. If you are concerned about leaving family members with an unpaid mortgage, the best thing to do is to contact your homeowner’s insurance agent. They can advise on what your current insurance covers and suggest good options for you and your situation. Term insurance, for instance, is frequently a better alternative than mortgage protection insurance. 

Sales of products and services to repair or maintain your home

Scams targeting homeowners with siding, painting and roofing services, and solar panel sales and installation, are common. Roofing scams tend to increase after major storms. Solar scams can be harder to spot because they may appear to be more sophisticated, involving expensive and complex financing. 

Scammers for these products and services may exaggerate damage to a home, use high-pressure sales tactics, offer “free” services, and make claims about non-existent government programs or incentives. 

Homeowners also may hear from companies posing as Internet service providers or utility companies. They may offer special deals and try to trick you into paying for services you do not need, claiming your account is expiring or that a recent payment was declined. 

If you think you need a home repair, or want to improve it with certain products or services, do your own research. Take the time to get quotes from reputable companies and check their credibility on online review sites. Refrain from responding to people who approach you in an unsolicited manner. 

Home warranty scams

A home warranty plan covers the cost of repairs and/or replacements for some of your home’s appliances and systems. Companies charge fees on a monthly or annual basis. Often, you will also pay a service fee if a technician needs to come to your home. In some cases, these plans can help homeowners better budget for unexpected repair and replacement costs, but it’s important to understand all the details of the program before signing up.  

It’s also important to research any company you are considering and be sure they are presenting themselves honestly. For instance, while Unlock does not offer any home warranty services, some companies have fraudulently marketed themselves as affiliated with Unlock. Be especially wary of any company using high-pressure sales tactics and research any company you are considering.  

Foreclosure and refinancing assistance

In this scam, a company could try to convince you to refinance under the guise of lower monthly payments. Again, some of the scammers may pose as your mortgage lender or as Unlock. But the result could be higher payments, a longer loan term and more debt – through the use of deceptive and unfair lending tactics. Moreover, they could use their “refinancing” process to obtain personal and financial information. 

If you are interested in refinancing your mortgage, or if you are struggling to make your mortgage payments, contact your existing lender first. You also can research other lenders to learn about the refinancing process and see if it’s right for you. 

Lien on your property 

Lien on your property

Some scammers will present themselves in communications as attorneys, contractors or representatives of a government entity, and claim that they are placing a lien on your home to collect an unsettled debt. They may even reference the IRS to appear more legitimate.  

Never respond to these requests for personal identification or financial information. If you have debts you want to pay off, and cannot use your HEA funds to do so, contact your creditors to discuss payment plans. For serious debt hardship situations, you may find debt resolution (settlement) an option. If someone claims they have placed a lien on your home, contact your county clerk and ask if there is an official record. 

Fake real estate listings

If you are looking to sell your home, you will likely take advantage of online real estate listings. While these listings allow you to reach a larger audience, they also can attract scammers posing as interested buyers. A scammer might seem overly eager to offer a large down payment or make a cash offer and promise to deposit money into your account – then run a wire fraud or cashier’s check scam. 

If you’re looking to buy a home, be aware that scammers can pose as fake sellers looking to obtain your down payment, and personal and financial information. 

Working with a credible real estate professional often can help you avoid these types of scams. If you choose to go the “for sale by owner” route, consider working with a local real estate attorney to help you through the process. 

How to protect yourself

The scams listed above are only a few of those you might encounter as a homeowner. To stay safe, keep these tips in mind: 

• Be aware. Be wary of unsolicited calls, emails, text messages and mail from unknown entities, especially those with offers that sound too good to be true, require upfront payment or pressure you to act quickly. 

• Protect your identity. Never provide any personal identification or financial information over the phone or online to any company before you research it and verify it as a trusted source. Even then, make sure you initiate the call or other communication. If you receive any unsolicited communications, you can hang up, delete the email or text, and contact the company’s legitimate number or address yourself. 

• Verify credentials. Check lenders of other financial service providers at nmlsconsumeraccess.org. 

• Don’t rush. While it can take time, conduct your own research into the products and services you are considering. Obtain referrals if possible, check online review sites, and get a few quotes from reputable companies before making a decision. 

• Stop junk mail solicitations. You can decide what catalogs, magazine offers, and other mail you want to get and not get from marketers by registering at the Association of National Advertisers’ website: DMAchoice.org. The fee is $6 and will cover the service for 10 years. You also can contact the Federal Trade Commission to opt out of pre-screened credit card and insurance offers: optoutprescreen.com or 888-5-OPT-OUT (888-567-8688). 

• Report scams. If you believe you’ve been a victim of a scam, stop all communication with the suspected scammer immediately. Document any communications you have had, and then report the scam to local law enforcement, your state’s consumer protection office and your financial institution(s). You can also file a complaint with the Federal Trade Commission.  

Unlock’s policies

Occasionally, scammers have posed as Unlock. Remember that most Unlock communications are conducted through your secure dashboard. As a customer, you also will receive emails from us, but they will be clearly identified with Unlock’s branding, including our corporate address and website URL, and will come from an Unlock email address. Unlock will never call, text or email asking for your password, banking information, or debit/credit card number.  

And if you are ever in doubt of any communication you receive from Unlock, contact our Customer Success team at support@unlock.com or 800-560-3450, Option 2.