For most adults, a mortgage will be the single largest purchase they make in their lifetime, but with this comes the risk of becoming a victim to a mortgage scam. This not only adds to the pressures of choosing the right lender but also adds to the importance of spotting red flags before falling for them. Given the substantial financial losses incurred and the challenges faced in recovering from mortgage scams, predatory lenders continuously adapt their strategies to avoid authorities and trap buyers.
It’s essential to remain vigilant against predatory practices, whether you’re a first-time buyer, in a vulnerable financial position or considering refinancing. To help people avoid falling foul of fraudsters, Pete Mugleston, MD and mortgage expert at www.onlinemortgageadvisor.
co.uk has outlined three of the most common mortgage-related scams to watch out for - deposit fraud, upfront fees and baiting scams. Mortgage deposit fraud stands as one of the most financially devastating scams individuals may encounter in their lifetime, with some experiencing losses totalling tens of thousands of pounds.
Also known as 'Friday afternoon fraud', deposit fraud typically involves criminals intercepting communication between homebuyers and their solicitors or conveyancers on completion day, often a Friday, hence the nickname. The fraudsters impersonate either the homebuyer or the solicitor, instructing the solicitor to redirect the funds for the property's deposit to a fraudulent account.
