Housing Scams

Beware of these frauds and scams when buying or foreclosing on a home.

Avoid Moving Fraud

While most moving companies are reputable businesses that do quality work, there are some that attempt to take advantage of clients through fraudulent practices. Follow these guidelines to protect yourself against moving fraud:

  • Get a written estimate from several movers. Some companies quote a low price to get a contract—and later ask for more money before they remove your belongings from their truck.
  • Make sure the mover has insurance and is licensed by the proper authority.
  • Check the mover's record. You can find out the mover's complaint history with local consumer advocacy organizations, such as the Better Business Bureau.

File a Complaint

  • If you have a dispute with a moving company, you should file a complaint with the Federal Motor Carrier Safety Administration (FMCSA). Note: Moving company complaints handled by the FMCSA must cross state lines, but can be reported at any time.
  • If you have a complaint involving an intrastate move (a move within the boundaries of a state), contact your state or local regulatory authority.

Help and Resources

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Foreclosure Scams

Dishonest companies or individuals sometimes target homeowners who are struggling to meet their mortgage commitment or are anxious to sell their homes. Scam operators like this promise to help you keep your home or sell your home without having to go into foreclosure, for a fee. However, they rarely deliver on what they promised.

These scam operators find potential victims in several ways:

  • Advertise online and in local publications
  • Distribute flyers
  • Contact people whose homes appear in the foreclosure notices (they can easily find these notices online or in a local newspaper)
  • Target specific religious or ethnic groups

Common Foreclosure Scams

There are several types of foreclosure scams, but some scam activities or offers are common. Be cautious if the company:

  • Offers to negotiate with your lender
  • Advises that they can stop foreclosure by "helping" you file for bankruptcy
  • Asks you to sign over the title to your house to them and make smaller rental payments to them until you can afford to buy the house back later
  • Promises to act as an intermediary between you and your mortgage lender to refinance your loan
  • Instructs you to make payments directly to them instead of the lender
  • Claims that they are affiliated with government mortgage modification programs (keep in mind that legitimate, government approved programs do not charge fees to participate in them)
  • Encourages you to sign fake foreclosure rescue documents
  • Claims that they can perform a forensic mortgage loan audit to help you hold onto your home

File a Complaint

If you need to report a foreclosure scam, you may file a complaint by contacting the Federal Trade Commission (FTC). If the scam involves bankruptcy, contact a local U.S Trustee office.

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Predatory Loans

Most mortgage professionals are trustworthy and provide a valuable service, helping you to buy or refinance your home. But dishonest or "predatory" lenders do exist and engage in practices that increase the chances of borrowers losing their homes to foreclosure. To avoid becoming a victim of predatory lending, you need to understand the process to buy a home and be a smart consumer. 

What Is Predatory Lending?

Predatory lenders, appraisers, mortgage brokers and home improvement contractors could use any of these tactics to take away your home or investments:

  • Sell properties for much more than they are worth using false appraisals.
  • Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
  • Knowingly lend more money than a borrower can afford to repay.
  • Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
  • Charge fees for unnecessary or nonexistent products and services.

Avoid Predatory Loans by Being a Smart Consumer

To avoid becoming a victim of predatory lending, follow these guidelines:  

  • Before you buy a home, attend a homeownership education course offered by a U.S. Department of Housing and Urban Development (HUD)-approved, non-profit counseling agency.
  • Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.
  • Get information about the prices of other homes in the neighborhood. Don't be fooled into paying too much.
  • Hire a qualified and licensed home inspector to carefully inspect the property before you are obligated to buy. Determine whether you or the seller will be responsible for paying for the repairs. 
  • Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.

If you believe you have been a victim of predatory lending, you can find a list of federal, state, and local resources at the HUD Office of Housing Counseling.

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Rental Scams

Rental scams happen when either a property owner or potential tenant misrepresent themselves or the terms and availability of a rental property. Fake ads and fake responses to rental ads can hurt both tenants and property owners. Learn the signs of rental listing scams so you won't become a victim.

Rental Tenants

Signs of a Scam Targeting Renters

  • The advertised price of the rental property is much lower than that of similar properties.
  • Ads for the property have grammatical and spelling errors, overuse of capital letters, or use uncommon spellings of words, like "favour" instead of "favor."
  • The person trying to rent you the property claims to be an agent for the property owner who is too busy, out of the country, or otherwise unavailable to handle the rental.
  • The owner or agent requires you to sign the lease before you see the rental property.
  • The owner or agent isn't able to let you enter the home or apartment or charges you a fee to view it. 
  • You're asked to wire money as a deposit or payment of first and last month's rent. Remember wiring money is the same as giving cash. You can't get a refund, even if you find out the offer was a fraud.
  • The owner or agent uses high pressure sales tactics, urging you to rent quickly, before someone else gets the property.
  • The person preparing the lease writes in a higher monthly rent or additional fees that you hadn't agreed upon. 

Report a Scam

Report a rental scam to your state consumer protection or attorney general's office, or local law enforcement. If you found the rental ad online, report the scam to the website where it was posted. 


Renting Vacation Property

Private home and room rentals are common housing choices for a vacation. But since you don't live in the area where the property is located, you can't check the property in person before you rent. To make sure your vacation is fun, take these steps to avoid vacation rental property scams

  • Look at pictures of the rental property and maps of the area before you rent the property. Make sure the property is located close enough to the tourist sites and attractions that you want to visit.
  • Research complaints about the property owner or listing agent with the state consumer protection office.
  • Contact the real estate licensing agency in the place where the vacation home is located to learn your rental rights. 
  • Make sure payment and refund policies are written into your contract.
  • Pay with a credit card so you can dispute the charge for the rental, if there is a problem.

Report a Scam

Report a rental scam to the state consumer protection or attorney general's office or local law enforcement where the property is located.


Rental Property Owners

If you are the person listing a property for rent, you could be victimized by a potential renter as well as imposters who use images of your property to create their own listings. Before renting your property, meet the prospective tenant, or the person responsible for paying the rent. Do a background check of their name and e-mail address to see if they have been flagged by others as a rental scammer.

Signs of a Scam Targeting Landlords

  • The prospective tenant is willing to sign a lease, without seeing the property or is in a rush to get the rental agreement in place.
  • You can't verify the tenant's income.
  • Someone contacts you about your property on behalf of a friend or working as an agent for someone else.
  • The prospective tenant sends you a check for more than the amount of the rent and asks you to deposit the check in your bank account and wire back the overpayment. If the check is fake, you'll be liable to pay your bank the full amount.

Report a Scam

Report a rental scam to your local law enforcement office.

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