Housing scams: the complete guide to spotting them

Housing scams strike at the moments of greatest pressure: when you are looking for a place to live, when you are about to close on a purchase, when you fall behind on the mortgage, when a storm damaged your roof, or when you need a filing done and someone “knows someone”. This guide is the index of all of them: it sums up how the official agency that watches each scam describes it, which signs give it away, what to do if you already paid and where to report it. Where we already have a full guide, we link it.

What a mortgage relief company can charge you before you sign the agreement with your lender

$0¹³

There is a narrow exception for attorneys.

The initial intake at a HUD-approved counseling agency

Free¹⁶

To cancel a credit repair contract at no charge

3 business days²²

Of a non-binding estimate, the most a mover can demand at delivery on an interstate move

110%²⁵

The script they all share

Before going one by one, notice what they have in common. The FTC describes it the same way in every scam: they rush you to decide now;¹⁸ they ask for money before giving you anything (a “processing” fee, a deposit “to hold it”, an advance to “save” your home);²³ and they want payment by wire transfer, gift cards, cryptocurrency or cash, which is “the same as sending cash”: once sent, you probably will not get it back.¹

The CFPB and the FTC explain why scammers want those methods: they move money quickly and anonymously. A wire is like sending cash. No legitimate business or government agency will insist that you pay with a gift card. And if you pay with cryptocurrency, you usually cannot get your money back unless the person sends it back.²

Government agencies never call, write or message you to ask for money.²⁰ Real agencies and banks also do not threaten you or ask you to send money to “protect it”.²⁸ And nobody legitimate will ask you to sign papers with blank spaces or to transfer the deed to your home.⁹

1. Fake rental ads

The FTC describes two patterns: scammers copy the pictures and description of a real listing and repost it with their own contact information, or they advertise places that are not for rent or do not exist, with surprisingly low rent; the fake owner often says they are out of the country and rushes you.¹ The signs: rent far below the area’s, pressure to decide quickly, a home listed for sale rather than for rent, an owner who will not show the property, and requests for payment by wire, gift cards or cryptocurrency, or for your Social Security number and pay stubs before you have agreed to rent.¹ Report it to local law enforcement, the site where the ad appeared, the FTC and your state attorney general.¹

Full guide: How to avoid rental scams.

2. The email that changes the account on closing day

The CFPB warns that scammers send spoofed emails, posing as your agent or the settlement agent, with last-minute changes to the wiring instructions. What they are after is your down payment and closing costs, diverted into a fraudulent account, and the CFPB warns that a victim can lose their life savings.³ This kind of wire fraudwire fraud at closingThis is a scam aimed at people about to close on a home. Days before closing, the scammer sends an email that looks like it comes from your real estate agent or settlement agent with "new" instructions to wire or electronically transfer your down payment or closing costs to a different account. If it works, getting the money back can be very hard. The CFPB recommends writing down two trusted contacts ahead of time, confirming any instructions with them using only those numbers, and not using phone numbers or links in the email. If it happens to you, call your bank right away to stop or reverse the transfer.See the full definitionClose arrives exactly when you have the most money in play.

The CFPB’s rule: pick two trusted people from the start; confirm the instructions, including the account name and number, in person or by the phone number you agreed on beforehand; never follow instructions received by email or use its links or phone numbers. If you already sent the money, call your bank or wire company immediately and ask for a “wire recall”: reporting it quickly improves the chance of getting it back. Then file a complaint at ic3.gov.³

To know how much money you will move on closing day, read Closing costs explained, and to check the final papers, Closing Disclosure explained: what to check before signing.

3. “Notarios” and advisers who are not lawyers

In many Spanish-speaking nations, notarios are attorneys with special credentials. Not here: in the United States, a notary public is a person authorized by the state to witness the signing of documents, and that does not authorize them to provide legal services, let alone immigration services.⁴ The Department of Justice confirms it: notarios, immigration consultants and “travel agents” cannot give you legal advice, tell you what immigration benefit to apply for or represent you in immigration court; only licensed attorneys and accredited representatives can.⁵

The same trick shows up in housing: someone who “fills out the papers” for a loan, a program or the ITIN for a steep fee. USCIS and immigration court forms are free on those agencies’ websites, and immigration court (EOIR) employees never call to ask for personal information or money.⁶ For the ITINITIN (Individual Taxpayer Identification Number)An ITIN is a nine-digit number the IRS, the federal tax agency, issues to people who need a U.S. taxpayer identification number to file taxes and are not eligible for a Social Security number. It is for tax purposes only: it does not authorize you to work in the United States, does not qualify you for Social Security benefits or the Earned Income Tax Credit, and says nothing about your immigration status. You apply with Form W-7, and it expires if it goes unused for several years. Some lenders accept an ITIN for a mortgage.See the full definitionClose, the IRS helps you for free at its Taxpayer Assistance Centers and at some VITA sites.⁸

Full guide: Notario is not a lawyer: who can give you legal advice. For the ITIN, the steps are in How to get an ITIN: Form W-7.

4. Promises to save your home from foreclosure

When you fall behind, companies appear promising a modification or to stop the foreclosureforeclosureForeclosure is the process by which the lender or servicer takes back the property after the homeowner fails to make mortgage payments. The rules and timelines depend on each state; all of them include advance notices and, in general, time to catch up or ask for an alternative, such as a repayment plan or a loan modification. If you fall behind, call your servicer and a HUD-approved housing counseling agency early: foreclosure counseling is free and exists for exactly this.See the full definitionClose. The FTC describes their signs: they promise changes they do not deliver, ask for an upfront fee, tell you to stop talking to your lender and pay them instead, try to get you to transfer the deed, and pressure you to sign quickly.⁹ The CFPB adds more: letters with logos that look like the government’s, the promise of a “forensic audit” of your loan and the advice to stop paying your mortgage, which can hurt your credit and limit your options.¹⁰

What the rule says. Under Regulation O, a company selling mortgage help cannot request or take any payment until you have signed a written agreement with your lender or loan servicerloan servicerThe loan servicer is the company that sends you your mortgage statements and handles the day-to-day tasks of the loan: it processes your payments, answers your questions, keeps track of principal and interest paid and manages your escrow account, if you have one. It can also offer options if you fall behind and, in certain cases, start a foreclosure. It may be the same company that lent you the money or a different one, and it is common for another company to take over the loan after closing.See the full definitionClose that includes the offer the company obtained.¹³ Its messages must tell you that it is not associated with the government, that you can stop working with it at any time and that, if you reject the offer, you do not have to pay.¹² It also cannot tell you not to talk to your lender or pose as part of the government or of a nonprofit counseling agency.¹¹

The exception: attorneys. The rule does not apply the same way to an attorney who provides this help as part of practicing law, is licensed in the state where you live or where your home is, and complies with the state laws that cover the same conduct. Even then, they can only take money before doing the work if they deposit it in a client trust account and follow the state’s rules for those accounts.¹⁴ The CFPB puts it this way: if a lawyer, or someone claiming to offer legal help, wants to be paid before you receive a modification, they may be breaking the law. And no one can guarantee you a modification, because your mortgage company has to agree to it.¹⁵

Who helps with your mortgage, and when can they charge you?

Free or close to it

HUD-approved counselor

• For mortgage trouble, the CFPB says they are available at no cost.¹⁰
• Cannot charge for the initial intake and must serve you for free if you cannot pay.¹⁶

Nothing up front

Mortgage relief company

• Cannot charge you until you sign the agreement with your lender.¹³
• If you reject the offer it obtains, you do not pay.¹²
• Cannot tell you not to talk to your lender.¹¹

Narrow exception

Attorney

• Must be licensed in the state where you live or where your home is.¹⁴
• If they charge up front, the money goes into a client trust account under state rules.¹⁴
• Cannot guarantee you a modification.¹⁵

Before paying anyone, call your loan servicer and a HUD-approved counselor.¹⁰

Your real options if you fell behind: If you can’t pay your mortgage.

5. Deed theft and the “title insurance” that insures nothing

The FTC explains that title fraud is identity theft: someone pretends to be you and transfers the deed to your home to someone else. The “title lock insurance” advertised on television is neither a lock nor insurance: it is a monitoring service that would tell you only afterward, and it does not stop the transfer. What does work, and is free: checking your title at your state’s or county’s land records office, signing up for the free notification program for ownership changes where one exists, and, if someone used your identity, following the recovery plan at IdentityTheft.gov.¹⁷ Do not confuse this with the title insurancetitle insuranceTitle is the legal right of ownership of the home, and title insurance protects you if, after closing, someone claims a right to it: an old debt, an heir, an error in the records. There are two policies. Most lenders require a lender's policy, which protects the amount they lent. The owner's policy is optional, paid once at closing, and protects you for as long as you own the home, including the legal costs of defending your right. You can shop for a title company; the price varies by state.See the full definitionClose at closing, which is real insurance.

6. Contractors who take the money and vanish

The FTC sums up the signs: they knock on your door because they are “in the area”, say they have leftover materials, pressure you to decide now, ask for everything up front or cash only, ask you to pull the permits or suggest borrowing from a lender they know. What it recommends: licensed and insured contractors, several written estimates, a written contract with no blank spaces, never paying the full amount up front (some states limit the down payment) and no final payment until you are satisfied.¹⁸

After a hurricane or a flood the pattern repeats with more pressure: discounts “only if you sign today”, payment by wire or cash and the request that you sign over your insurance check. And FEMA charges no application fees, so anyone asking for money to “get you” FEMA help is a scammer.¹⁹

7. Calls from “HUD”, “the IRS” or “immigration”

Scammers pose as government agencies, say you owe money or are in trouble and threaten something bad if you do not pay or hand over your information. The FTC is categorical: government agencies never call, write or message you to ask for money; do not pay by wire, gift cards, cryptocurrency or payment apps to anyone who says they are with the government; hang up, do not trust caller ID and call the agency yourself using a number you know is correct.²⁰ The same goes for anyone claiming to call from immigration court: its employees never call to ask for personal information or money.⁶

8. Credit repair and “guaranteed” loans with a fee

Two scams that feed on the same fear: your credit reportcredit reportA credit report is a statement that has information about your credit activity and current credit situation: your loans and cards, the balances, whether you have paid on time, accounts in collection and who has checked your credit. Credit reporting companies, also called credit bureaus, compile it from what banks and creditors report; your credit score is computed from it. When you apply for a mortgage, the lender pulls your report from the three bureaus. You have the right to see it for free and to dispute anything that is wrong.See the full definitionClose. The FTC warns that scam credit repair companies ask you to pay before they help, tell you not to contact the bureaus, to dispute accurate information or to lie on applications, or promise a “new” credit identity; everything they do, you can do yourself for little or no cost.²¹

The CFPB is clear: no one can remove accurate negative information from your report, and a credit disputecredit report disputeA credit report dispute is the complaint you make when your credit report has wrong or incomplete information. You have the right to dispute it, and the investigation is free. It is usually done in two places: with the credit reporting company and with the company that supplied the information, called a furnisher, such as your bank, your landlord or your credit card company. You explain in writing what is wrong and why, with copies of your documents. The credit reporting company must investigate, generally within thirty days, and delete or correct anything found to be inaccurate, incomplete or unverifiable.See the full definitionClose over errors is free and something you can do yourself. Knowingly filing a false identity theft report is a crime. If you already signed with a credit repair company, you have the right to cancel the contract for any reason within three business days, at no charge.²²

In advance-fee loan scams they promise the loan “regardless of your history” and ask you to pay a “processing” or “insurance” fee first; nobody legitimate will tell you that paying a fee guarantees a loan, and it is illegal for a telemarketer to promise one and charge before delivering.²³ If you see ads for “ITIN mortgages, guaranteed approval” that ask for money before the application, it is the same script.

To build real credit: Credit from zero. To fix errors: How to dispute credit report errors.

9. Movers who hold your belongings

The FTC recommends checking that the company is registered with the Department of Transportation for an interstate move, getting written estimates from several movers after they look at your belongings, asking about insurance, and not hiring anyone who asks you to sign paperwork with blank spaces or demands cash or a big deposit before the move.²⁴ There is a legal cap on what you can be charged at delivery on an interstate move: the exact amount of a binding estimate or 110 percent of a non-binding one, plus any additional services you requested.²⁵ If they ask for more to unload the truck, that is a warning sign: report to the Department of Transportation and the FTC.²⁴

10. Loans against your home that push you to sign

Once you own, offers to refinance or to borrow against your home will come, sometimes hand in hand with a contractor. The FTC reminds you that you can cancel a loan or a line of credit on your main residence within three business days for any reason and without penalty; that if the financing is not what you expected, you should not sign; and that you should talk to an attorney, a financial advisor or someone else you trust before deciding.²⁶ To know what to check in the papers of any loan secured by your home, see what a Closing DisclosureClosing DisclosureThe Closing Disclosure is a required five-page form with the final details of the mortgage you selected: the loan terms, your monthly payment, every closing cost and how much cash you must bring on signing day. The lender must give it to you at least three business days before closing, so you can compare it with your Loan Estimate and ask about any change. If an important number changes, the three-day period starts again. Keep it: you will need it for your taxes.See the full definitionClose is.

If this is you

Some scams go after people in particular situations. These are the ones the official sources mention most.

What to watch most closely

You have or need an ITIN

Do not pay a “notario” for the ITIN: the IRS takes applications for free at its Taxpayer Assistance Centers and some VITA sites.⁸ And be wary of a “guaranteed” mortgage that asks for a fee before the application.²³

You are looking for a place to rent

Do not pay without seeing the property, and do not give your Social Security number or pay stubs before agreeing to rent.¹ More in How to avoid rental scams.

You own your home

No one can charge you to “save” your home before you sign the agreement with your lender,¹³ and “title lock insurance” does not stop deed theft.¹⁷

You are an older adult or care for one

The “grandchild in trouble” scam is often aimed at older adults: before sending money, call your relative at a number you trust.²²

If you already paid: the first hours

Do not blame yourself: these scams are built to fool anyone. What matters now is acting fast and in order. The official agencies describe these steps:

If you already paid a scammer

1. 1. Call your bank or the payment company

   As soon as you notice

   If you sent a transfer or an app payment, alert them that there may have been an unauthorized transaction.²²

2. 2. If it was your closing money, ask for a wire recall

   Immediately

   Ask the bank or wire company for a “wire recall”; reporting it quickly improves the chance of recovering it.³

3. 3. If you paid with a gift card, cryptocurrency or cash by mail

   The same day

   Call the card issuer using the number on the back, the crypto exchange or ATM operator, or the U.S. Postal Inspection Service.²⁷

4. 4. Report the scam

   As soon as you can

   At ReportFraud.ftc.gov or ic3.gov, to your state attorney general and to your local police through their nonemergency number.²⁸

5. 5. If you gave your Social Security number or documents

   That same week

   Make your recovery plan at IdentityTheft.gov.²⁷

6. 6. If it was a fake notario

   When you can

   Call EOIR's Fraud and Abuse Prevention Program at 1-877-388-3840 or email EOIR.Fraud.Program@usdoj.gov, and keep every communication.⁷

7. 7. Be wary of anyone who promises to recover your money

   Always

   The FBI's IC3 does not work with law firms or crypto services to recover funds, and never contacts you to ask for information or money.²⁹

The FTC details each payment method: with a credit or debit card, call the issuer or your bank and ask for a refund; by bank transfer or Zelle, ask the bank to reverse the payment; by wire, the wire transfer company; with a payment app, the app. If you gave your Social Security number, IdentityTheft.gov gives you a recovery plan, because that can turn into identity theftidentity theftIdentity theft happens when someone uses your personal information without your permission to commit fraud: for example, your name, your Social Security or Medicare number, or your credit card or bank account number. With that information, a thief can rent a home, get credit cards, receive government benefits or tax refunds, or open other accounts in your name. You often find out when your credit report or a statement shows accounts or charges you do not recognize, or when a debt collector calls. The federal site IdentityTheft.gov takes reports and gives you a recovery plan.See the full definitionClose.²⁷ If it was a mortgage relief scam, the CFPB says you can find legal help through your local bar association or legal aid.²²

Keep everything: ads, emails, messages, receipts, names and numbers. If it was a fake notario, EOIR asks you to recover and keep every communication and document from the scammer.⁷ And do not wait until you are sure to report: the IC3 asks you to file even if you are unsure whether your complaint qualifies.²⁹

Warning signs and what to do instead

If you recognize any of these signs, stop. This is what the official sources say to do instead.

The warning sign and what you do instead

• Mistake: They ask for an upfront fee to “save” your home.

  Instead: Do not pay: the company cannot charge you until you sign the agreement with your lender,¹³ and a HUD-approved counselor helps you at no cost.¹⁰

• Mistake: They demand payment by gift card, cryptocurrency or wire.

  Instead: No legitimate business or government agency insists on a gift card; a wire is like sending cash.²

• Mistake: An email arrives with new instructions for wiring your closing money.

  Instead: Do not follow it: confirm the account in person or by the phone number you agreed on beforehand.³

• Mistake: They ask you to sign your home's title over to them while they “fix” your loan.

  Instead: Nobody legitimate asks for that. Talk to your loan servicer and a HUD counselor.¹⁰

• Mistake: A “notario” tells you which immigration application to file.

  Instead: That is legal advice: only an attorney or an accredited representative can give it.⁵

• Mistake: Someone offers to recover what you lost for a fee.

  Instead: Report it yourself at ic3.gov: the IC3 does not work with private companies to recover funds.²⁹

To find a HUD-approved housing counselor who speaks Spanish, the HUD-approved housing counselors guide explains how to search and what to expect at the first appointment.

What to do this week

1. If you are about to pay or sign something, run it through the questions in the checklist below and look at the payment method they want.²
2. If you fell behind on the mortgage, book an appointment with a HUD-approved housing counselor and do not pay anyone who promises to “save” the home before you sign the agreement with your lender.¹³
3. Homeowners: look your home up in the county’s land records and ask whether the free change alert exists.¹⁷
4. If someone is helping you with an immigration filing, ask whether they are an attorney or an accredited representative before you pay.⁵
5. Already paid? Call the bank or the issuer today and report at ReportFraud.ftc.gov or ic3.gov.²⁸