Alert for Veterans: New VA Website Fights Housing Scams

Vets and family members can qualify for certain benefits from the U.S. Department of Veterans Affairs, including home loans. Some swindlers want to steal their glory. Members of the military, and their loved ones, are more likely than other households to become fraud targets.

Now, Veterans Affairs officials are confronting the new wave of scams that target some of vets’ most important benefits.

Here, we look at what’s happening, and list the top ways to safeguard your deed and your family’s finances from scam artists. 

You Might Be a Veteran If…

Your phone keeps ringing with robocalls, and pinging with unsolicited text messages. Your junk email file overfloweth.

You get offers to receive cash from an escrow account. Other offers urge you to take cash from your home equity, even if you don’t need funds for a specific reason.

Most active servicemembers and vets have been hit up by scammers at some point. The VA’s relatively easy refi policies (no appraisal, for one) can motivate shady lenders to refinance vets’ loans. The “churning” of loans by refinancing puts fees in lenders’ pockets. In short, veterans’ deeds draw more manipulative salespeople than civilians’ deeds do.

Not only do fraudsters lure vets to sign unfair agreements; they even threaten criminal prosecution against vets who can’t meet the terms of their manipulative contracts.    

The VA expects fraud to increase. Helpfully, under a federal provision effective since last year, a veteran claiming unfair or deceptive business tactics can sue for up to 3X damages.

New Website Unveiled: Introducing VSAFE

The Veterans Affairs Department has just announced the launch of VSAFE.gov. The new website came online in August 2024.

It draws on the knowledge banks of various federal government agencies. It connects veterans, their households, and caregivers with:

• The website VA.gov/VSAFE. This explains “common scams, protecting yourself, reporting fraud, and getting help.”

• Information vets can use to check whether a loan offer matches up with VA rules and regulations.

• A central help line to have specific questions answered: 1-833-38V-SAFE (1-833-388-7233).

Note: If you or your family’s been targeted, report the fraud to police, your state Attorney General’s office, and the Federal Trade Commission (FTC).

California AG Steps Up for Vets

Some lenders advertise below-market rates without pointing out their sky-high fees, or without explaining to the borrower that the rate is actually adjustable. The Consumer Financial Protection Bureau’s victims relief fund has clawed back millions for borrowers.

States are also on the case. Consider California. Last month, the California Attorney General, Rob Bonta, posted a consumer alert to tip off vets, troops, and families. Look out, AG Bonta warned, if you run into any of these situations:

• Someone calls, identifying themselves as being with your mortgage company or the government. They offering access to loan changes, or say they’ll make payments for you.

• The representative promises you military perks when asking for personal details.

• You get instructions to stop paying your mortgage company, and send the funds to a different recipient.

• Someone wants you to sign a deed or a legal agreement.

Some scammers say they’re calling from a military agency or organization in order to get personal information and misuse it. The sales rep could claim to be a veteran. Or the business might style itself as endorsed by the military.

It’s all happening in California — and just about everywhere else.

Renters Are Also Targets

Fake real estate agents are advertising rental units online. That in itself is not surprising. The twist here? Some dangle military discounts to get vets to trust them and pay deposits and fees up front.

Vets and their family members should avoid marketers who want cash for apartment homes, sight-unseen. A request to wire money to hold a rental unit could be a scam. Renter beware.

John D., a real, 70-year-old Pennsylvania resident, is a vet, married, with one child. On Facebook’s Marketplace, John found a 3-bedroom rental listed for just over $1K a month. John sent in money for a credit check, and signed an electronic lease. When the agent requested a security deposit and one month’s rent, John sent it.

On the appointed day, John went to meet the property manager and collect the keys to the family’s new home. Nobody ever came to meet him.  

It’s not just in Pennsylvania. Sometimes these schemes originate from other countries. Watch out for bogus listings and marketers with no interest in the actual properties they pretend to offer.

How to Protect Yourself: Current Tips

If you’re a deed holder, treat unexpected refinance offers as suspect. Predatory companies try to make offers related to the VA Streamline Refinance or the VA cash-out refinance. Refinancing sets the clock back on your mortgage, and is not always a wise move.

If you do want to refinance, shop around and pick a reputable mortgage lender yourself. Only after you apply and get your individual rate quote can you know an offer’s real value. Add up the loan fees and total interest throughout the loan, to determine if an offer makes sense for your household. 

If you’re a renter, look for a physical leasing office, or find actual signs in front of homes that show the home is for rent, and look up the agent’s details.

Government agencies also ask vets to consider these precautions:

• If your mortgage company needs to speak with you, check your account statement, find the trusted contact number, and initiate a call back.

• Avoid offers that fall afoul of financing regulations — like promises that you can skip payments when refinancing. “No closing costs”? Expect to pay them. They’ll just be folded into your loan.

• Do not sign a blank sheet or form for someone else to finish drafting or filling in.

• Looking at a rental offer? Check out the apartment in person and call the number on the sign, if any. Refuse to hand over money until you meet the property manager and tour the unit.

• Be careful how much information you share in an obit when a loved one dies. Swindlers can take details from death notices, according to AARP, then use them to impersonate distant relatives.

And here’s a friendly reminder from the VA and the FTC. Department of Veterans Affairs reps will never contact you to request personal information. If you didn’t initiate the contact, don’t give personal details.

Stay safe out there, friends.