‘I feel stupid’: This Oklahoma father is facing foreclosure on his $70k home despite paying $665/month for 15 years — here’s why and how to avoid a similar nightmare

Why one homeowner could lose his home despite never missing a mortgage payment

Now the mortgage lender is threatening foreclosure unless the $44,000 balance is paid in full on the spot, something Ortega can’t do. He only learned the truth when he was served with the foreclosure notice.

"I'm just a father, a family man trying to make it," he said. "I never thought that I would be a fraud victim.”

Ortega purchased the home from Home Masters LLC in 2009 for $70,000. He put down 10% of the home's purchase price and has paid $665 a month ever since. All told, he's sunk about $126,000 into the property.

KFOR reached out to the man who’s been collecting Ortega's payments all these years who said he’s working with a bank to resolve the situation and that Ortega has “nothing to worry about.” But he wouldn't provide details, leaving Ortega in limbo.

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How to avoid real-estate fraud

Real-estate transactions are a top target for consumer fraud, and the scams take various forms. Some involve fake listings of homes that aren’t really for sale, and would-be buyers pay a deposit to someone who’s not actually the rightful owner of the home.

Wire fraud can take place during the closing process, with a criminal emailing would-be buyers a link for the down payment. CertifID — a company that provides digital ID technology to prevent such fraud — reports that in 2023, almost 25% of US homebuyers received suspicious communications during closing and more than one in 20 became actual fraud victims.

Older Americans are particularly vulnerable. According to the FBI’s Elder Fraud Report, Americans 60 and older lost more than $65 million to real-estate fraud in 2023, making it one of the top 10 costliest frauds affecting that demographic.

There are steps you can take to protect yourself. First, work with a reputable real estate agent whether you're buying or selling a home. Never sign a contract or hand over a deposit on a home without verifying that the owner is who they say they are.

Ask for ID and proof that their name is on the deed. Ortega’s unfortunate situation might have been avoided if he had demanded proof that Home Masters LLC was the legal owner of the property.

Never send any payments without a signed real-estate contract. To avoid wire fraud, always check with your mortgage lender before wiring payments.

Finally, do your best to avoid predatory lending, where mortgage lenders charge exorbitant rates to borrowers with poor credit. While not technically fraudulent, this type of lending can be very costly.

High mortgage rates lead to higher monthly payments, making foreclosure more likely. If your credit is poor, look into different loan programs that could allow you to borrow affordably, like Federal Housing Association or USDA loans.