FTC’s fake mortgage-company site aims to educate about scams
The folks at Esteemed Lending Services are out to teach people a lesson.
Esteemed Lending isn’t a mortgage lender at all. It’s a fictitious company. If it existed, it might have taken a lot of people for a ride down the road to ruin.
But it does live in cyberspace, where many scam artists lurk. And that’s the whole point, according to the Federal Trade Commission, which created the “teaser” site that trumpets, “We guarantee a loan to fit every situation.”
“We designed the site with keywords in hopes that people will find it and realize there are a lot of scammers out there,” says Amy Hebert of the FTC’s Division of Consumer and Business Education. “This one isn’t a scam, but it could have been.”
In the first 60 days of Esteemed Lending’s “nonexistence,” nearly 3,500 people found it on the Web. In the greater scheme of things, that’s probably not a lot. However, it does indicate that even after the mortgage-market meltdown people are still searching for that magic moment when all their financial woes will be solved.
That is what the site promises. “Our qualified loan specialists have been helping people just like you find the best interest rate and loan terms possible for your unique situation,” it vows, backing up its pledge with a link to testimonials from several apparently happy but invented former customers.
“Even if you’ve been turned down by other lenders because of a less-than-perfect credit history, we can help,” it says. “It’s time to act and start saving money today. Apply now and let us help you start on your way toward a debt-free future!”
Sounds wonderful, doesn’t it? And “it’s easy to qualify and 100% FREE to apply.” There’s even a “Privacy” tab.
But click on any of the site’s many tabs and another page pops up, this one admitting what the real crooks don’t: You’ve been had.
“FAKE,” the next page shouts. “If you responded to an offer like this one, You Could Have Been SCAMMED!”
The page offers a list of red flags to warn you of how you could easily become another victim of mortgage fraud.
The Consumer Federation of America and the North American Consumer Protection Investigators said in a joint report that bogus offers of help directed at owners trying to save their homes from foreclosure constituted the fastest-growing complaint category last year.
“When times are hard,” says NACPI president Anna Huddleston-Aycock, an analyst with the Pinellas County (Fla.) Department of Justice and Consumer Services, “consumers are more vulnerable to false promises or easy ways to make or borrow money.”
Of course, while the thieves are always one step ahead of the authorities with ingenious ways to rip people off, the red flags posted on the Esteemed Lending site are neither new nor particularly exciting. But they remain tried-and-true ways of avoiding scams.
“No, there’s nothing different or particularly earth-shaking,” says the FTC’s Hebert of the warnings. “It’s just one more way to reach people and hopefully catch them at a teachable moment.”
Here are some common red flags:
• Upfront fees. Honest lenders don’t want your down payment until closing. The only thing you should be asked to pay for in advance is a credit check. The lender might also want you to pay for an appraisal, but you can demand that the appraisal be payable at closing.
• False claims. If it sounds too good to be true, it usually is. Never let anyone try to tell you that what you are considering is a once-in-a-lifetime deal and that you have to make a decision right now, this instant.
And never accept a stranger’s word without running the proposal by a trusted third party — your accountant, perhaps, or your lawyer or tax preparer. Even a relative or friend will do, as long as another set of eyes and ears sees and hears what you do.
• Seek help. If you are having financial difficulties, contact your lender right away. Never accept unsolicited offers of help by mail or phone from any company other than the one to which you send your mortgage payments. It’s illegal for companies doing business by phone to promise a loan and ask you to pay before it is approved.
If you find your lender or loan servicer to be uncooperative, consult a nonprofit consumer credit counseling agency. Call (800) 569-4287 or visit https://www.nhl.gov/offices/hsg/sfh/hcc/hcs.cfm to find a local counselor certified by the Department of Housing and Urban Development.
• No credit, no problem. An ad that guarantees loans for people with bad or no credit history is a sure sign of a scam.
• Copycats. Beware of official-sounding names, logos and websites. Crooks give their fake companies names that appear at first glance to be well-known, respected firms or government agencies.
• Lack of a license. In an effort to weed out the bad apples, lenders and brokers are now required by federal law to register or be licensed in the states where they do business. So check with the state regulatory body that oversees the mortgage business to be sure the person or company you are dealing with has complied.
lsichelman@aol.com
Distributed by United Feature Syndicate.
