Scam Alert - Target -- Your Home Equity

Even though the home mortgage business and home equity lines of credit are difficult to get, the fraudsters are still at it.

If you have significant equity in your home (Yes, Delores, some people do!) , you are likely to become a target real soon.

The Identity Theft Assistance Center, a nonprofit industry group, reports that identity thieves have recently began making targets of individuals with good credit because such people often have substantial untapped home equity.

A home equity line of credit is an ideal vehicle for criminals because they are typically “big pools of money,” and if consumers do not regularly check their accounts, that pool can drain quickly.

The FBI's annual mortgage fraud report, which was released in April, cited home equity credit fraud as an “emerging scheme” in the slumping real estate and mortgage market.

Now that lenders have vastly tightened their lending criteria, criminals who specialize in mortgage fraud have little choice but to move upstream and seek out victims with good credit. Home equity lines are a favorite option because they are almost as easy to open as a credit card account, as long as a criminal has the proper financial information.

Those with poor credit have been preyed upon by identity thieves in recent years, because thieves who pretend to be such owners could easily obtain mortgages from subprime lenders with little documentation.

Typically, the perpetrators pose as homeowners to establish home equity credit accounts online. Criminals will then often send a fax to the bank requesting a wire transfer of funds to a different account. To verify the request, the bank unknowingly calls the perpetrator. Duh!

Homeowners who have significant equity in their homes may be well-advised to check their credit reports frequently.

One way for a homeowner to determine if someone has created an equity credit line is to enroll in an identity fraud detection service.

The major credit bureaus; Equifax, Experian and TransUnion; offer credit monitoring services.

Be warned.

The Best Money Guy.