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Taking Action Against Scams: Beware of signing up for “free” money

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Posted at 7:09 AM, Oct 19, 2012
and last updated 2012-10-19 07:09:11-04

As tuition costs rise, keeping college affordable is a challenge. 

Scammers are taking advantage of that.

Several young Americans often take jobs to pay their way or to help their parents foot the bill for school.

But some students are losing a lot more in a new scam.

Between paying for room and board, text books and social lives, many college kids are strapped for cash.

So when they hear of a way to get easy money, they are all ears, which is exactly what a crooked mortgage broker was banking on. 

“He used their good name and credit to obtain these properties,” says Don Washington, US Postal inspector.

The student investor was told they didn't have to put up any money, just the use of their credit.

“He would put renters in the properties and they could earn the residual income by just by signing on the dotted line,” says Washington.

When they signed the closing documents on the investment properties, the broker claimed the rent payments would pay for the bank loan.

“After a while, after the home appreciated he would sell the homes and split the profit with them. Sounded like a good idea to these young people,” says Washington.

The problem is he didn't pay the mortgage, the homes went into foreclosure. The scam created a credit nightmare for these college students.  Instead of building wealth, they were heading for bankruptcy.

“If you have the feeling that you have been scammed, you should check your credit no more than 30 days when something like this has happened,” says Washington.

Anyone can be a victim of mortgage fraud.

Inspectors recommend having an attorney look over your paperwork carefully before signing any loan.