An old mortgage scam aims to hijack a payment or two
A mortgage scam in which con artists send letters telling borrowers they should begin sending their mortgage payments to a fictitious company that has begun servicing their loan, is making the rounds again. Unfortunately, by the time borrowers figure out their loan has not changed servicers, they’ve already sent one or two mortgage payments to the fictitious company.
Making sense of the story
• According to those familiar with the scam, it typically works because most borrowers are unaware of the rules when it comes to the transfer of mortgage-servicing rights. Under the law, the current servicer is required to send a “goodbye” letter notifying the borrower that payments should be sent to a new company as of a certain date.
• A week or two later, the law says the borrower should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment – a breakdown among principal, interest, and escrow. The package also is likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.
• Both the goodbye and welcome letter should include the mortgage loan number. If either letter does not, or if the information included in one doesn’t match what’s in the other, borrowers should call their original servicers to inquire.
• Borrowers only receiving one letter should be extra cautious. Even if everything appears to be standard procedure, borrowers are still advised to call the first company’s toll-free number just to be sure.