What is principal reduction and how does it help homeowners?

How much does principal reduction help homeowners struggling with their mortgage due to a financial hardship?

Just ask homeowners Charles and Kathleen, Gordon and Bettie, or Elaine (click the links and read their stories).

All these homeowners have benefited from Keep Your Home California’s Principal Reduction Program, which offers as much as $100,000 in principal reduction – all for free. In fact, almost 9,500 homeowners have been approved for the Principal Reduction Program.

charles

Charles and Kathleen

The popular program assists homeowners with unaffordable and/or underwater mortgages in California. About one of every eight homeowners with a mortgage in California has a negative equity mortgage.

Almost half of the homeowners approved for Keep Your Home California in second-quarter 2016 were enrolled in the Principal Reduction Program.

The program lowers principal – the amount owed on the mortgage – and also often reduces the monthly payment. In fact, the average homeowner approved for the Principal Reduction Program enjoyed a monthly mortgage payment reduction of $258, from $1,400 to $1,142.

That means fewer dollars owed and more money in your pocket. It’s a winning combination for everyone, from homeowners to local businesses.

San Francisco homeowners Charles and Kathleen save about $300 every month, thanks to Keep Your Home California’s Principal Reduction Program. “It’s like a weight taken off our shoulders,” Charles says.

elaine

Elaine

The lower monthly payments have definitely helped Elaine of Southern California, who was forced into an earlier-than-planned retirement and receives significantly less income, mostly from Social Security. Her principal was reduced by $81,500, which lowered her monthly mortgage by almost $400.

 

“It’s really made a big difference,” Elaine says

Bettie and Gordon, also of Southern California, save a few hundred dollars every month from the program.

“That was probably one of the happiest days of our lives,” Bettie says of when she and her husband were approved for the Principal Reduction Program.  “The big thing is we are still in our home, and we can stay here.”

bettie

Bettie

And that’s the goal behind the Principal Reduction Program. A vast majority of homeowners who have received principal reduction assistance from Keep Your Home California remain in their home two years later.

Keep Your Home California has three forms of principal reduction. Each plan helps homeowners in a unique way.

  • Principal Reduction-Affordability Provides principal reduction assistance to eligible homeowners with an unaffordable mortgage payment, defined as a debt-to-income ratio greater than 38% of the gross household income. The homeowner does not need to have an underwater – or negative equity – mortgage. The average homeowner has their principal balance reduced by $64,478, and the monthly payment by $296.
  • Principal Reduction-Recast Allows homeowners to obtain an affordable payment and lower total debt associated with their negative equity mortgage without using a servicer-provided loan modification. The rate and terms of the loan do not change, the loan is simply re-amortized based on the new, lower outstanding principal balance, which leads to lower monthly payments. The average homeowner has their principal balance reduced by $56,306, and the monthly payment by $217.
  • Modification In conjunction with a servicer-provided loan modification, program funds are used to lower the homeowner’s outstanding principal balance. The modification changes the terms of the mortgage to ensure the homeowner will have affordable monthly payments going forward. The average homeowner has their principal balance reduced by $37,193, and the monthly payment by $540.

Now, homeowners must have endured a financial hardship, such as a job loss, cut in pay, divorce, death in the family, extraordinary medical bills, or other financial challenges in order to qualify for the Principal Reduction Program. Keep Your Home California representatives will help determine whether the hardship qualifies for the program.

California Suburban Sprawl

 

Homeowners must meet county-by-county income requirements and their mortgage servicer – the company that collects the monthly payment – must participate in Keep Your Home California. Almost 190 servicers are enrolled in the Principal Reduction Program, including Bank of America, Wells Fargo and U.S. Bank.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-KEEP (5337) or find more information at www.KeepYourHomeCalifornia.org or www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

 

 


Documentation paves the way for up to $100,000 in free mortgage assistance

Paperwork is part of the application process with Keep Your Home California.

Nothing really new to you here — many of the documents that were necessary when you applied for a mortgage are also required for Keep Your Home California. But our application process may make homeowners eligible for much-needed financial assistance to ease their mortgage problems.

Instead of spending thousands of dollars when obtaining a mortgage –– for closing costs, down payment and escrowed funds — the Keep Your Home California application process is free.

On top of that, the federally funded, state-managed program is actually helping you save your home – along with your commitment, your effort and the money you have invested in your home. Plus, you don’t have to move and, for some people, that is priceless.

documents

Certain documents are needed to determine a homeowner’s eligibility for Keep Your Home California assistance. Documentation of eligibility is required before assistance may be provided, in order to safeguard this taxpayer-funded program.

The following are the most frequently required documents needed to apply for Keep Your Home California:

  • Pay stubs
  • EDD pay stub, if applying for the Unemployment Mortgage Assistance Program
  • Bank statements
  • A hardship affidavit letter (more information regarding hardships below)
  • Third-party disclosure
  • Tax forms from previous years, such as your 1040s
  • Current property insurance statement
  • Current property tax statement
  • A copy of a short sale or deed-in-lieu of foreclosure agreement (if applying for the Transition Assistance Program)

Now, each homeowner – and their situation – is different, so additional documents may be needed to verify eligibility for assistance.

It is almost impossible to overstate the importance of documentation in the Keep Your Home California application process. The reasons why homeowners need the mortgage assistance in the first place are revealed through the documents they provide.

Also, documents are vital to a homeowner’s eligibility determination. In fact, an application for assistance is not complete until all required documents have been provided. The documents are the key to unlocking the door to assistance from Keep Your Home California, which must meet federal requirements to safeguard this taxpayer-funded program.

There are three unique Keep Your Home California programs designed to help homeowners remain in their homes:

As mentioned above, homeowners must have endured or still be suffering from a financial hardship, such as a job loss, cut in pay, divorce, death in the family, extraordinary medical bills or other financial challenges in order to qualify. Keep Your Home California representatives will help determine whether your hardship qualifies for the program.

Also, homeowners must meet county-by-county income requirements and their mortgage servicer – the company that collects the monthly payment – must participate in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

Photo courtesy of the artists of Unsplash.

 


402,000 homeowners faced with underwater mortgages in California

Imagine everyone in Oakland dealing with a financial headache, one that can affect everything from their buying power to retirement plans?

That’s the far-reaching effect of negative equity in California.

Sure, the housing market has enjoyed a big-time boom—the median-home price is at the highest level in seven years—and many homeowners, especially those who bought in the past few years in the Bay Area and Southern California, are money ahead.

ID-10030595

But hundreds of thousands of homeowners—about 402,000—are dealing with an underwater mortgage, where they owe more than the current value of their home, according to the latest Zillow report.

We want to put that in some kind of perspective. It’s the equivalent of everyone who crossed the Golden Gate Bridge during the past three days. Or each traveler who passed through Los Angeles International Airport during the past two days. Or every person who entered Disneyland during the past 10 days.

 

And if you’re dealing with an underwater mortgage, even the happiest place on earth can be difficult to enjoy. Just ask the one of every eight homeowners with a mortgage who is faced with negative equity in the Golden State.

Many of these homeowners bought at the peak of the housing market – between 2005 and 2008, depending on the region – with little or no down payment. Now, they are faced with an underwater mortgage.

In fact, California homeowners have a combined $59.5 billion in negative equity, or about $68,000 per homeowner. And the chance that many of them will dig out anytime soon is unlikely.

‘Continuing to make monthly payments on an underwater home is like renting’

Certainly, the situation continues to improve, especially as home prices rise.  For example, fewer than 3% of homeowners with mortgages in San Francisco are underwater. And only 6.5% in Los Angeles County – though the county has the most underwater mortgages at 75,411, with a combined total of $14 billion in negative equity.

Bakersfield sign 5_12-12

But drive two hours east of the Bay Area or two hours north of Los Angeles and the situation is much different. Madera and Kern counties are dealing with 16%-plus rates of underwater mortgages, respectively. Negative equity is a problem throughout much of inland California, with double-digit rates – and several counties top 19% (Lassen County has the highest rate in the state at 24.8%).

It could be a very long time before these homeowners escape negative equity—or get right-side-up, says Southern California mortgage consultant Greg Cook.

“Continuing to make monthly payments on an underwater home is like renting, but with the interest mortgage deduction,” he says. “And if one of those pesky ‘life events’ happen (such as a divorce or job loss) and they’re forced to sell, it’s either foreclosure or short sale, which puts subsequent homeownership out of the question for three to seven years.”

than-merrill-headshot-2-1

Than Merrill

Now, if homeowners are making their mortgage payments on time and have no plans to sell, then negative equity is not much of a problem, says Than Merrill, a national real estate expert who founded CT Homes LLC and was a host of A&E’s Flip This House.

“Whenever you are confronted with a debt that exceeds the home’s value, otherwise known as negative equity, your financial position on the asset will take a hit,” Merrill says. “However, the fact that you are underwater may not impact your situation as you may have originally anticipated, especially if you have no intentions of moving anytime soon. As long as you are OK paying considerably more than the home is worth, and can afford to continue to do so, your finances should remain intact.”

As much as $100,000 available to help homeowners with underwater mortgages

For homeowners who aren’t OK paying considerably more and want to escape an underwater mortgage, Keep Your Home California is a possible solution. The free mortgage-assistance program’s Principal Reduction Program offers as much as $100,000 to low- and moderate-income homeowners dealing with underwater mortgages.

So far, more than 9,100 homeowners have been approved for the Principal Reduction Program, receiving about $548 million since February 2011. Many of those homeowners were dealing with an underwater mortgage.

ID-10028383

The average homeowner has received $60,220 from the Principal Reduction Program since early 2011. For many homeowners, the program offers another benefit—lower monthly payments. The average homeowner approved for the Principal Reduction Program in the second quarter of 2016 saved almost $260 per month.

Now, homeowners must meet county-by-county income requirements and have experienced or continue to suffer from a financial hardship—such as a job loss, cut in pay, divorce to extraordinary medical expenses—to be eligible for Keep Your Home California. The homeowner’s mortgage service, the company that collects the monthly payment, must participate in the program. About 250 mortgage servicers, including Bank of America and Wells Fargo, are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

 


Celebrating homeownership month by saving homeowners

June is Homeownership Month, when federal and state agencies, lenders and real estate agents educate and encourage home-shoppers to become homeowners.

Homeownership is critical for building strong communities, creating jobs, energizing the economy – and is often a good investment for homeowners over time.

Keep Your Home California was established as a result of the Great Recession. The goal was to help neighborhoods, communities, the economy and, of course, homeowners by providing mortgage payment assistance to people who suffered financial hardships in order to keep them in their homes.

So far, the federally funded, state-managed program has helped more than 64,000 homeowners avoid foreclosure since early 2011.

California Suburban Sprawl

Many of these families would have lost their homes, and it would have taken several years before they could have been eligible to apply for a mortgage and return to being homeowners. Some homeowners may have never been able to afford a home down the road, especially with fast-rising home prices and much-stricter lending requirements.

In fact, only one of every three families could afford to buy the median-priced home in California during the first quarter of 2016, according to the California Association of Realtors.

California’s homeownership rate was about 54% in 2015, much lower than the 61% in 2006 (considered the peak of the housing market) — and a full 10 percentage points below the 64% rate nationwide, according to the U.S. Census Bureau.

In short, buying – and owning – a home in California is much tougher today than a decade ago.

So, Keep Your Home California’s financial assistance to hard-hit homeowners during the past several years is arguably just as important as helping first-time homebuyers. Perhaps even more.

Of course, many of the housing market problems continue to plague Californians.

Foreclosure Notice, House Keys and Model Home on Gradated Background with Selective Focus.

Foreclosures and short sales dominated headlines – and the housing market – from 2007 through 2012. While foreclosures have dropped from the highs of that time period, there were still 23,000 homeowners faced with losing their home and leaving their neighborhoods during the past year, according to the most recent CoreLogic report.

Even with the higher prices, unaffordable or underwater mortgages – where homeowners owe more than the value of their home — are still a concern for many homeowners, especially in the Central Valley, the Inland Empire (Riverside and San Bernardino counties) and Northern California. About 400,000 homes with mortgages are underwater in California, according to the most recent data.

California’s housing market has definitely improved, but it still has a long way to go for many homeowners. So, as we celebrate the efforts to help people become homeowners during Homeownership Month, we should also recognize the importance of homeownership preservation.

Keep Your Home California services are provided free of charge. The program helps homeowners faced with a financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical benefits. Homeowners with unaffordable or underwater mortgages can qualify for the Principal Reduction Program, which offers as much as $100,000 on mortgage assistance.

Under the Unemployment Mortgage Assistance Program, out-of-work homeowners could receive as much as $3,000 per month for up to 18 months – or $54,000 total – in mortgage assistance. Homeowners must be eligible for jobless benefits. About 1 million Californians are unemployed, according to the Employment Development Department.

Homeowners must meet county-by-county income requirements, which range from more than $70,000 in rural areas to almost $130,000 in higher-priced regions, such as the Bay Area and Orange County. And a homeowner’s mortgage servicer, the company that collects the monthly payments, must participate in the program. More than 250 mortgage servicers – including Bank of America, Wells Fargo and Chase – are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

 

 


Additional funding allows Keep Your Home California to help more homeowners

Keep Your Home California has received an additional $383.3 million in funding from the federal government, providing the free mortgage-assistance program with resources to help at least 12,000 more homeowners.

The U.S. Department of the Treasury announced the additional funding last month, the second phase of funding approved for Keep Your Home California from the Hardest Hit Fund during the past three months.

With the additional dollars, Keep Your Home California will continue to December 31, 2020, or until the money is used. Previously, the deadline for the federally funded program was December 31, 2017.

John Chiang

State Treasurer John Chiang

“The announcement of additional funding for Keep Your Home California further validates the ongoing challenges many Californians are experiencing with homeownership,” said state Treasurer John Chiang. “We are excited to have the opportunity to help many more California homeowners who are struggling with their mortgages due to unaffordable payments, unemployment, negative equity and other financial hardships.”

The additional funding comes soon after Keep Your Home California reported its two best quarters since the state-managed program started in February 2011. Keep Your Home California issued more than $95 million in funding during the third and fourth quarters of 2015 – or a combined $190 million-plus for the second half of last year.

“While the housing market continues to recover, we know some homeowners and areas are still experiencing the damaging effects of the housing crisis,” said Mark McArdle, Treasury Deputy Assistant Secretary for Financial Stability.

California – the nation’s largest housing market and one of the hardest-hit from the housing crisis several years ago – had more than 1 million jobless residents in March. At least 50,000 homeowners in the state are 90 days or more behind on their mortgage payments, which often leads to foreclosure. California also has the most negative-equity than any state at $65 billion.

Tia Boatman Patterson

CalHFA Executive Director Tia Boatman Patterson

“The demand for assistance from homeowners and the figures from housing industry reports clearly demonstrate the continued need for Keep Your Home California,” said Tia Boatman Patterson, Executive Director of the California Housing Finance Agency. The state agency oversees Keep Your Home California. “Our primary goal is to help struggling homeowners with their mortgage problems, but everyone, from neighborhoods to state government, benefits from Keep Your Home California.”

Keep Your Home California helps homeowners faced with a financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical benefits. Homeowners with unaffordable or underwater mortgages could qualify for the Principal Reduction Program, which offers as much as $100,000 on mortgage assistance.

Homeowners must meet county-by-county income requirements, which range from about $70,000 in rural areas to more than $120,000 in higher-priced regions, such as the Bay Area and Orange County. And a homeowner’s mortgage servicer, the company that collects the monthly payments, must participate in the program. More than 250 mortgage servicers – including Bank of America, Wells Fargo and Chase – are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org.  The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays.


Are homes affordable across California?

Editor’s note: Zillow has provided a special blog for Keep Your Home California, detailing the financial challenges of owning a home in California.

By Satinder Haer

California’s real estate scene has received a lot of attention over the last few years. While prices skyrocketed in San Francisco, 10.2 percent of homeowners in Riverside are facing underwater mortgages. For many individuals, rising home prices coupled with stagnant wages in the last decade have caused concerns about the affordability of homes across California.

Check out these five markets where Zillow calculated whether a median priced home would be affordable for a family earning the median income for that city.

Aerial Southern CA

Los Angeles

Los Angeles boasts a median home value of $586,000 as of February 2016. A simple mortgage calculator shows that a median-priced L.A. home with a traditional 20 percent down payment and 3.5 percent mortgage rate would result in a $2,760 monthly payment, including taxes and insurance.

Assuming that an individual is making the median income for an L.A. household, $49,682, a median-priced home in L.A. would not be affordable. One of the factors that lenders look at during the mortgage approval process is your debt-to-income ratio (DTI)—the total of your housing expenses and other monthly loans (including credit card, student loan and car loan debts) divided by your gross monthly income. For a conventional loan, you need a DTI of 36 or less. With an annual salary of $49,682 and zero existing debts, a DTI of 36 would allow you to qualify for maximum mortgage payment of $1,489 according to a DTI calculator.

Using the general rule for affordability—that a buyer’s mortgage, taxes and insurance should not exceed 25 to 28 percent of his or her gross monthly income—a median income earner in L.A. should spend no more than $1,035 to $1,159 on housing costs. Regardless of which calculation method is used, the monthly payment of a median priced Los Angeles home, $2,760, would far exceed what these calculations show is considered affordable on a salary of $49,682.

San Diego

Home prices in San Diego are slightly lower than Los Angeles with a median home value of $531,000.* The median income however, is higher in San Diego, at $65,759. While a lower median home value and higher median income is generally a sign that homes are more likely to be affordable in that area, a median-priced home in San Diego still isn’t quiet affordable on a median salary.

Based on a DTI of 36, you could qualify for a maximum mortgage payment of $1,973 with a salary of $65,759. However, the monthly mortgage on a $531,000 home, assuming 20 percent down and a 3.5 percent mortgage rate, would run you $2,508. The general rule of affordability paints an even worse picture. On a median San Diego income, you would want to spend no more than $1,369 to $1,534 on your monthly housing costs. The average San Diego earner would have to increase their income in order to afford a median-priced home or consider less conventional financing options that allow for a DTI ratio higher than 36.

Sacramento

Homes in Sacramento are priced significantly lower than other major California metros while the median income is comparable to those other metros. The median home in Sacramento will cost you $259,600* while the median household income sits at $50,013.

Using the same calculation, the monthly mortgage for a $259,600 home with 20 percent down and a 3.5 percent mortgage rate, would be $1,260. The DTI calculator indicates that you could afford to spend $1,500 on your mortgage if you had an income of $50,013 and no other debts. According to these calculations, a median earner in Sacramento could actually afford a home priced above the median home value in Sacramento.

The general rule of affordability does not generate exactly the same positive outlook. On a $50,013 salary, the rule suggests you’d want to spend between $1,041 and $1,166 on your housing costs each month. While this rule indicates you’d be spending more than 25 to 28 percent of your income to afford the $1,260 payment on a median priced Sacramento home, you’d be just outside the suggested percentage for housing costs. Overall, the median earner in Sacramento could likely afford the median priced home.

San Jose

Both the median home price and median income are higher in San Jose than most other California markets. A median San Jose home will cost you a whopping $817,000* while the median earner can expect to bring home $83,787. Affordability may be a serious concern in San Jose, even for those bringing home $83,787 annually, as they would not be able to afford a median-priced home.

With a DTI of 36 and zero debts, an individual earning $83,787 can expect to qualify for a maximum monthly mortgage of $2,514. Using the general affordability rule, that same individual should expect to spend $1,745 to $1,955 if they want to spend 25 to 28 percent of their gross monthly income on housing. However, the mortgage for a median-priced home in San Jose would be $3,822 each month. Both calculations indicate that you’d have to be earning well over the median in San Jose.

Oakland

Oakland, once known as San Francisco’s less expensive neighbor, is also now seeing steadily rising housing prices. The median Oakland home now goes for $586,800* while Oakland residents make a median household income of $52,962.

The DTI calculation suggests that with a DTI of 36 and the salary of a median Oakland household, the maximum mortgage payment an individual could qualify for is $1,598. However, the monthly mortgage payment on a median-priced Oakland home with a traditional 20 percent down payment and a 3.5 percent mortgage rate would cost $2,764—unaffordable on the median Oakland salary. The general affordability rule also indicates the median home in Oakland would be unaffordable for a median earner with a suggested monthly housing cost of only $1,103 and $1,235.

While the high prices in some California markets are discouraging to potential homebuyers – and shed light on affordability issues for homeowners who are struggling to stay in their homes – the numbers vary significantly by market. Affordable areas exist, but there are certainly a lot of areas where low to moderate income Californians face homeownership challenges.

*Median home prices are reflective of market data from February 29th, 2016 on Zillow’s Home Value Index.

If you are dealing with an unaffordable mortgage, please consider Keep Your Home California, a free mortgage-assistance program that offers as much as $100,000 in principal reduction. You can call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org.The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays.

 


Foreclosure crisis profiteers: Knowing the enemy

Our previous two posts dealt with the origins of the Foreclosure Rescue Scam and provided some characteristics to help homeowners recognize a scam from a safe distance. Even armed with good information, it’s sometimes hard to differentiate the good guys from the bad.

The scammer is well rehearsed at sounding smart, compassionate and sincere. At Keep Your Home California, we investigate these people fairly often and we seldom find conclusive evidence of their misdeeds. In this post, we will provide you with some practical steps that you can follow to review and identify these con artists. Warning: None of these techniques are foolproof and it’s very difficult to identify a scammer with any level of certainty.

ID-100291860

It is our hope that by doing a little research, you might uncover enough “red flags” to steer you away from potential danger before you lose any money. Here are a few simple steps that you can take to perform a high-level review:

  • Review correspondence from the potential Scammer. It’s likely that most of your contact with a scammer will be by email and telephone. The scammer typically doesn’t want to meet face-to-face. It’s unlikely they have an office and they might be located nowhere near you. Look at their email address. Is there a company or organization designation? Very often, scammers use public email services such as Hotmail, AOL or Gmail because they don’t work for a legitimate organization. A public email address is a red flag.

 

  • Ask about and verify licenses. Sometimes the scammer claims to be an attorney or claims to have a real estate license. They may tell you not to contact your lender, lawyer or credit counselor. Ask for their license or bar number and then verify the license with the State Bar of California or the California Bureau of Real Estate. Even without a number, you can search by name.
    • For an Attorney Search, go to http://members.calbar.ca.gov/fal/membersearch/quicksearch. Contact the attorney using the phone number listed in their profile, not the number given to you by the Scammer, to verify that the person listed is actually the person who contacted you.
    • To verify a Real Estate License, go to http://www2.dre.ca.gov/PublicASP/pplinfo.asp. Independently locate a phone number, using the internet or other genuine phone directories, and contact the person to verify that the person listed is actually the person who contacted you.

 

  • Evaluate their website … if they have one. The absence of a website is a major red flag. However, most scammers have a website. And, because they often have to change names to elude being caught, their websites are usually very sparse. A few pages without much real content and almost never the names, or photographs, of any employees, managers or executives. Their “Contact Us” page will usually be limited to an online contact form. No physical address, no phone numbers, no email addresses.

 

  • Check their physical address. If you do happen to have what appears to be a physical address, put it into Google Maps and see what appears. Go to the “Street View” if it is available. You might see an office building or a private residence but, more often than not, you will see a shopping center and one of the tenants in that shopping center will be a UPS Store, or similar mailbox service. Red flag!

 

  • Perform an Internet search. Use an effective search engine and look for the name of the company, of any individuals you can identify, and also search phone numbers that you have been given. If you poke around enough, you just might find useful information such as previous complaints.

 

  • Requests for fees. Any request for fees or money before any services are performed, payments in cash, money order or “wire transfers” are all warning signs.

Please remember that you might be dealing with criminals and we aren’t advocating that you become a private investigator or vigilante. Do not, in the course of your review, misrepresent yourself or violate anyone’s rights or privacy. If your research indicates that you are likely dealing with a Scammer, do not confront them, simply disengage.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net.