Michigan borrowers face mortgage scams that exploit the state's specific real estate market conditions, regulatory environment, and demographics. Understanding what these scams look like in practice gives residents a meaningful advantage in protecting themselves.
Unlicensed Mortgage Brokers and Loan Officers
Michigan requires mortgage brokers and loan officers to be licensed through the Department of Insurance and Financial Services (DIFS). Unlicensed operators face no regulatory accountability, have no bond or errors-and-omissions insurance, and may vanish with collected fees without consequence. Verifying a broker or loan officer's license before providing any personal or financial information costs nothing and takes minutes at the NMLS Consumer Access website (nmlsconsumeraccess.org).
Fake Refinance and Rate Lock Offers
Scammers send mailers and emails to Michigan homeowners claiming they've been preapproved for a refinance at below-market rates. The offer looks official and may include references to the homeowner's current lender by name. The "lender" asking for an upfront processing fee or rate lock deposit is the fraud. Legitimate lenders do not collect upfront deposits before an appraisal or commitment for routine refinances.
HOA and Tax Payment Interception
A less common but growing Michigan fraud involves scammers contacting homeowners with notice that their HOA dues or property taxes are delinquent and offering to resolve the delinquency for a fee. Payment is made to the scammer rather than the actual municipality or HOA. The actual obligation remains unpaid. This is a variation on phantom help targeting homeowners who may be uncertain about their payment status.
Federal Assistance Impersonation
Michigan's HAF (Homeowner Assistance Fund) and related federal programs have been impersonated by scammers offering to help homeowners access assistance for a fee. Legitimate HAF assistance is administered through Michigan State Housing Development Authority (MSHDA) and is free to access. Any company charging a fee to access these programs is a scam.
Reporting Michigan Mortgage Fraud
Report Michigan mortgage fraud to: DIFS at michigan.gov/difs, the Michigan Attorney General's consumer protection line, the FBI's Internet Crime Complaint Center at ic3.gov, and HUD's Office of Inspector General at hudoig.gov. Keep all documentation including mailers, emails, and payment receipts.
Related: Detroit lending fraud and loan modification scams.