Fraudsters can take advantage of older adults by pressuring or helping them obtain funding for home repairs by applying for a reverse mortgage and then stealing the funds from the reverse mortgage. In this fraud bulletin, HUD OIG shares a recent case example where the fraudster was sentenced to more than 17 years in prison and provides tips on how senior homeowners can avoid reverse mortgage scams by purported contractors.
LA Wildfires: Fraud Risk Awareness for Affected Residents
The devastating and tragic wildfires in Los Angeles, like many natural disasters, have caused hardship conditions that leave individuals, businesses, and communities vulnerable to bad actors who take advantage of those impacted by these severe weather emergencies.
Beware Of Fake Assisted-Housing Waitlists
HUD OIG is aware of schemes whereby fraudsters falsely announce on social media that waitlists for housing vouchers, including “Section 8” or other government-assisted housing are opening soon
Avoiding Disaster Benefits Fraud
The U.S. Department of Housing and Urban Development (HUD) provides funding to victims recovering from natural disasters. It is critical that applicants fill out all paperwork and answer all questions truthfully when applying for disaster benefits.
Hawaii Wildfires: Fraud Risk Awareness for Affected Residents
The devastating and tragic wildfires on Hawaii’s Maui, like many natural disasters, have caused hardship conditions that leave individual, businesses, and communities vulnerable to bad actors who take advantage of those impacted by these severe weather emergencies.
Mortgage Rescue Scams Following a Disaster
Natural disasters affect millions of Americans each year. Homeowners who experience a temporary or permanent loss of income due to a natural disaster or an increase in expenses post-disaster may be financially vulnerable, making it difficult for them to make mortgage payments. View the video.
Disaster Repair Scams and Contractor Fraud
Be on the lookout for fraudsters who may try to take advantage of quick timeframes and difficult circumstances that individuals and communities face following a disaster. View the video.
Social Media Scams
Be on the lookout for fraudsters impersonating HUD employees using social media schemes to offer you grants or housing assistance from HUD and asking for payment or personal information to receive grant funds.
Fraudsters may use social media or other tactics to steal money from you by offering fake HUD benefits or fake HUD grants.
Foreclosure Fraud Schemes
Foreclosure fraud schemes can happen when a homeowner falls behind on their mortgage, usually, after a sudden life changing event challenges their financial stability, such as a death, a job loss, a medical issue, or other unforeseen event.
Sexual Harassment is Illegal: Know Your Rights!
Did you know sexual harassment by a landlord, maintenance worker, or anyone with authority, control over, or official access to your rental property is against the law? No one should have to choose between having a roof over their head and the threat of being sexually harassed or sexually assaulted by their housing provider.
Freedom of Information Act
Did you know, the Freedom of Information Act, also known as FOIA, is a law that gives any person the right to request Federal agency records. The FOIA also requires Federal agencies to make certain types of information available to the public without the need to submit a request, such as frequently requested records.
Residential Lead-Based Paint Reduction Act
Did you know there is a law that protects families from exposure to lead from paint, dust, and soil? The Residential Lead-Based Paint Reduction Act, also known as Title X, was enacted in 1992 and includes provisions focused on educating the public on lead-based health risks and the proper steps to abate or remove the hazards of lead-based paint.
Identity Theft Fraud
Identity theft is a common fraud scheme that can negatively impact HUD programs and its beneficiaries. ID theft happens when someone steals your personal information or create false identities to commit fraud, such as using a stolen identity to apply for and illegally receive HUD benefits.
Impostor Landlord Fraud
Be aware that individuals purporting to be landlords are listing properties for rent that they do not own on various rental websites. These impostor landlords may be part of a complex organized criminal enterprise operating outside of the United States.
Reverse Mortgage Fraud
Reverse mortgages are complex loans, making them the perfect breeding ground for a scam. Scammers use this type of loan to take advantage of older Americans— stealing their hard-earned money and, in some cases, their homes.
Deed Fraud
Fraudulent deed activity can impact anyone who might buy, sell, or own property; however, the elderly, distressed homeowners, and unwitting buyers and renters have been particularly impacted by this scheme.
Lead Disclosure Rule
The Lead Disclosure Rule requires landlords to provide disclosures concerning lead paint to prospective tenants in “target housing,” which includes most houses constructed before 1978.
Landlord Overcharging Section 8 Tenant Fraud Scheme
Landlords cannot change the rent without obtaining approval from the local housing authority and cannot avoid Federal rent limits by making side deals with tenants.
Cash or Gift Card Phone Scam
Be aware! Phone and computer scammers may contact you and claim to be from the government. These scammers may threaten you with jail or fines if you do not send them cash or gift cards within a short period.
Mortgage Loan Modification Scams
Be aware! Mortgage loan modification scams are schemes to take your money, often by making a false promise of saving you from foreclosure.
Section 8 Housing Voucher Fraud Scheme
Protect yourself and avoid falling victim to Section 8 housing voucher fraud schemes.
OIG Fraud Bulletin: Reverse Mortgages
HUD OIG drafted a fraud bulletin outlining potential common reverse mortgage schemes that borrowers may face, along with actions to take and not take if you are considering a reverse mortgage loan.
OIG Fraud Bulletin: Loan Modification and Foreclosure Rescue Schemes
HUD OIG drafted a fraud bulletin outlining potential loan modification and foreclosure rescue schemes that borrowers may face.
OIG Fraud Bulletin: Protect Yourself From Fraud
Dishonest people may approach you with fraudulent offers of assistance during these economically difficult times. Be on the lookout for these common schemes. Note that scam attempts may be made by phone, mail, text, email, social media, or in person.
OIG Fraud Bulletin: For Renters
Be aware that dishonest people may take advantage and could attempt to harm renters through scams or forms of harassment.
Transnational Fraud Ring Impersonating U.S. Government Procurement Offices and Officials
The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), and the Office of the Chief Procurement Officer have identified an ongoing fraud scheme intentionally targeting small businesses, large corporations, government vendors, and contractors for the purpose of obtaining electronic equipment such as laptops, mobile phones, hard drives, digital projectors, solar panels, and other high-value merchandise. The email phishing attempts entice vendors to ship high-value merchandise and equipment to suspicious addresses and locations that are frequently either public storage companies or abandoned commercial properties.
Key Internal Controls Related to Disaster Recovery Procurement
The urgency in post-disaster recoveries often leads State and local officials to work to quickly restore infrastructure and public services and help make repairs. Such urgency can sometimes result in cutting corners with CDBG program requirements. However, grantees and sub-recipients that do not follow all CDBG program requirements may be forced to repay Federal funds.
COVID-19 Fraud Bulletin: Reverse Mortgages
HUD OIG drafted a fraud bulletin outlining potential common reverse mortgage schemes that borrowers may face, along with actions to take and not take if you are considering a reverse mortgage loan.
COVID-19 Fraud Bulletin: Anticompetitive Bidding Schemes
HUDOIG drafted a fraud bulletin on how to identify anticompetitive bidding schemes that may occur in COVID-19-Related procurements.
COVID-19 Fraud Bulletin: Loan Modification and Foreclosure Rescue Schemes
HUD OIG drafted a fraud bulletin outlining potential loan modification and foreclosure rescue schemes that borrowers may face.
COVID-19 OIG Bulletin: For Homeowners
HUD OIG drafted a bulletin outlining guidance that the Federal Housing Administration (FHA) has provided for borrowers and servicers to implement the forbearance provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
COVID-19 Fraud Bulletin: For Borrowers
In response to the pandemic caused by the coronavirus disease of 2019 (COVID-19), Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provides protections to borrowers with loans insured by the U.S. Department of Housing and Urban Development (HUD). The Office of Inspector General would like to make sure you are aware that dishonest people may attempt to take advantage of the crisis to harm you.
COVID-19 Fraud Bulletin: Protect Yourself From Fraud
The Office of Inspector General recognizes that we are facing both uncertain and unprecedented times and is alerting the public about potential fraud schemes related to the CARES Act funding. Dishonest people may approach you with fraudulent offers of assistance during these economically difficult times. Be on the lookout for these common schemes. Note that scam attempts may be made by phone, mail, text, email, social media, or in person.
COVID-19 Fraud Bulletin: For Renters
In response to the pandemic caused by the coronavirus disease of 2019 (COVID-19), Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provides protections to renters who receive assistance from the U.S. Department of Housing and Urban Development (HUD).
Procurement & Contracting: Five Ground Rules for Grantees and Subrecipients
Goods and services must be procured in an effective manner and in compliance with Federal, State, and local laws. These laws exist to ensure that funds are awarded through fair and open competition and are spent on eligible and reasonably priced goods and services. Although the majority of grantees and subrecipients comply with these rules and regulations, we are issuing this bulletin to assist you in identifying potential weaknesses in procurement and contracting procedures.
Is Fraud Worth it? - Now in Multiple Languages
Now you can read this important message in several languages!
Is Fraud Worth it? - In Arabic
Is Fraud Worth it? - In Cantonese
Is Fraud Worth it? - In Korean
Is Fraud Worth it? - In Vietnamese
Is Fraud Worth it? - In Russian
Is Fraud Worth it? - In Spanish
Is Fraud Worth it? - In Mandarin
Procurement & Contracting: Five Ground Rules for Executive Directors and Commissioners
Goods and services must be procured in an effective manner and in compliance with Federal, State, and local laws. Although the majority of public housing agencies (PHA) comply with these rules and regulations, we are issuing this bulletin to assist you in identifying weaknesses in procurement and contracting procedures.
Reverse Mortgage Schemes - Fraud Bulletin
While the majority of companies promoting FHA reverse mortgages are safe there are some mortgage fraudsters out to take your money, your house, or even your identity. Reading this alert is your best defense.
A reverse mortgage allows borrowers to convert part of the equity in their homes into cash without having to sell their homes. To aid in this process, borrowers must meet with an FHA-approved Reverse Mortgage Lender to discuss program eligibility requirements, financial implications and alternatives to obtaining the mortgage and repaying the loan.
More information on reverse mortgages can be found:
• By calling the National Council of Aging at 1-855-899-3778.
• Or at the following website:
HOW TO PROTECT YOURSELF DO’S
• Speak with a HUD-certified housing counselor.
Free counseling is available or at modest cost depending on your income. It is important to ask for a face-to-face interview rather than by telephone. To locate a HECM counselor near you, call (800) 569-4287 or go to http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
• Make sure you have money to pay your real estate taxes and hazard insurance on your home every year. You are responsible for both expenses and could lose your home if you do not pay them. This is the biggest cause of foreclosures!
• Work with a reputable lender.
Check the listings with the Better Business Bureau at http://www.bbb.org/
• Shop around.
Scammers will insist that they are the only lender you should speak with. Do comparisons of 2 or 3 offers.
Attend the closing personally and make sure any proceeds are given to you and not someone else.
If you do not understand why you are signing papers talk, with a trusted friend, attorney, of other family members. Let your counselor know if you feel pressured to take out the reverse mortgage.
SCHEMES
Fraudsters use different scams. They will try to sell you on taking a lump sum payout, and use it to pay them for:
- High Cost or Unneeded Repair Contracts
- Reverse Mortgage Counseling Fees
- High Profit Insurance Policy
- “Can’t Miss” Investments
- Finder Fee Annuities From
“Their” Company
Typically, once the fraudsters get the mortgage proceeds, they disappear, and the service is never provided. Fraudsters also may trick seniors who do not own a home into thinking they can buy one with no down payment using this program.
After the lump sum is paid out, the fraudster disappears with the money, and the senior is left with no cash or equity in the home. They may face eviction if taxes on an over-valued property are not paid.
DON'Ts
• DON’T purchase an annuity or make other investments with your loan proceeds from the lender. Loan officers are prohibited from selling you financial instruments or investments.
• DON’T sign up for a reverse mortgage unless there is a real need for the funds that you have identified, and not something a stranger has talked you into getting.
• DON’T believe anyone who tells you that you can get a house for free or with no down payment.
• DON’T sign a power of attorney to a person you don’t know or trust.
• DON’T give in to “high pressure” sales tactics. If pressed to sign, just walk away.
Where to Report Fraud, Waste and Abuse:
For FHA borrowers, report to the HUD Office of Inspector General. You must submit a complaint to refer the matter for investigation. |
For non-FHA loans, you may send reports to: Federal Bureau of Investigation Phone: 1-800-CALLFBI (225-5324) Online Tips: FBI Tips and Public Leads Form at https://tips.fbi.gov/ |