VA-backed home loans totaled more than $144 billion in FY 2023, with the average loan worth more than $360,000. That figure draws attention from all manner of financial actors – not all of it good.

One lender specializing in VA-backed loans faces a $2.25 million civil penalty after the Consumer Financial Protection Bureau (CFPB) found it “gave misleading and incomplete cost comparisons to borrowers” regarding cash-out refinance loan options, the bureau announced last month. And while the case affected veterans in just three states, homeowners around the nation should be on watch: One report claimed a 34.6% increase in home lending fraud in 2023.

Whether you’re looking to secure a new mortgage or considering refinance options, or you’re just a homeowner who has ended up on some lender mailing lists, here are eight tips to keep your cash safe.

1. You have options. Not all cash-out refinances are products of scam artists. The VA does back certain cash-out loans, including those used to turn non-VA-backed mortgages into VA-secured ones. Learn more about the benefit at this link.

2. You have rights. Lenders must follow specific protocols regarding mortgage adjustments, including disclosure procedures, fee explanations, and more. Get the full list from the Federal Trade Commission.

[RELATED: New VA Website, Call Center to Protect Veterans From Increased Fraud Risk]

3. You have protections. Servicemembers and veterans have special foreclosure-prevention rules in their favor, especially those who took out home loans before entering service (under the Servicemembers Civil Relief Act, or SCRA). Learn more about these rules from the CFPB.

4. Know who’s calling. The VA will not call borrowers directly about their loan unsolicited, but borrowers may receive calls or mail from individuals pretending to represent the VA, or from lenders using VA-themed imagery in their mailers to imply a connection. When in doubt, hang up or trash the mailer.

5. Refinance smart. The VA’s interest rate reduction refinance loan (IRRRL) may allow you to reduce your monthly mortgage payment with limited paperwork and no home inspection. However, this streamlined approach makes the loan a favorite target of scammers. Read up on the IRRRL process to make an informed decision.

[RELATED: Report Shows Spike in Scam Type That Frequently Targets Veterans, Servicemembers]

6. Go direct. Contact your lender through your lender’s website (or a phone number on a mortgage document) with questions or concerns. Other lenders are not permitted to ask you to stop communicating with your initial lender, per the CFPB – watch out for this red flag.

7. Be patient. Do not allow yourself to be rushed into major financial moves; an over-eager lender could be urging you to move fast so you’ll skip your due diligence or sign something without reading it.

8. Ponder payments. Scammers could work multiple angles – some may request upfront fees and disappear before providing any services, while others could claim to offer services “at no additional cost” as a way to collect your personal data.

Stay Smart – Stop Scams

MOAA has multiple resources to help identify scams of all types, many of which will apply to avoiding mortgage fraud. Premium and Life members can access exclusive recorded webinars with our experts and guests covering scam prevention. Find out more about these offerings at this link.