If you're looking to refinance, beware of the con-men out there who will try to steal your money.

"I started getting the funny feeling that something just wasn't right," said one victim of a refinancing scam, who doesn't want to reveal her identity.

Her instinct was right. The small business owner and her husband needed to refinance their business, but their bank turned them down.

"Our mortgage company gave us his information and he said he was basically capable of getting anything done that none of the other lenders would be able to do," she explained.

The "he" she is referring to is Charles Grove, who operated a company called CG Financial.

"He would ask them for an upfront advance fee," said US Postal Inspector Michael Egner. "They come up with this money and in some cases they have to borrow the money for the advance fee from friends, relatives or whatever because they are deathly afraid of losing their business."

Hope quickly turned to disappointment.

"Whenever we were supposed to meet or discuss the details, something would come up. His mom would be in the hospital or he had to travel for another client," the victim said.

"These people are skilled at putting people off," warned Egner. "That is part of the game."

Grove, who faces up to 25 years in prison, is accused of duping 32 victims out of more than $350,000. Victims say they were crushed.

"For the safety of my children and our credit history and worrying that our credit was compromised for the future… anything… not know basically the unknown of figuring out how far he went with our information," said the victim.

"It is an unscrupulous thing to do, that people who target people who are already in trouble and take them for the last money that they have, that is about the most heartless thing you can do," added Egner.

Egner say consumers trying to refinance should ask for references and you should ask many questions,  "Did you get your loan? Were you able to get it back? What was the finance? What was the interest? Was this the kind of guy who used his own money?"

"Finding out that it was a scam the whole time that was the most hurtful. So many people try to promise you things but you can't trust them," said the victim.

If you're looking to refinance your mortgage, the Better Business Bureau has steps to take to avoid the scams that are out there:

  • If you are considering refinancing, BBB suggests you shop around, compare prices and negotiate. But also move with caution when dealing with some lenders. To help you decide if refinancing is for you and to help you prepare to approach a financial institution, BBB offers these tips.
  • When you refinance your home, you simply apply for a new mortgage at the lower rate in order to pay off the old loan. This means that, for many lenders, you will again be required to pay most of the costs you originally incurred to get your first mortgage - loan application fees, title search, appraisal, credit check, lawyer's services, discount points (in many cases) and other finance charges.
  • Before you go through the expense of refinancing, check the interest rates to make sure they have dropped to a level that makes refinancing worthwhile. Conventional wisdom states that a two or three percent difference between the rate on your current mortgage and the new rate over a period of time - generally several years - usually offsets the costs you must pay at closing. The ultimate amount you may save depends on many factors, including your total refinancing, whether you sell your home in the near future and the effects of refinancing on your tax situation.
  • If you decide to refinance, obtain information from several lenders. Knowing just the amount of the monthly payment or interest rate is not enough. Ask for information about the same loan amount, loan term and type of loan so that you can compare the information.
  • Also, be cautious of smooth-talking lenders that contact you offering easy credit, guaranteed low-interest loans or loan terms that sounds too good to be true. Fraudulent lenders often prey on people who are desperate for cash to pay bills, make home repairs or who do not understand the mortgage loan process. Their loan terms can include excessive fees, high interest rates and provisions that can make it expensive for you to get out of the loan. If a lender asks for an up-front fee before you can obtain the loan, look elsewhere. Be sure to check with the BBB and your state attorney general for a reliability report on the lending institution (s) you are considering.
  • Once you know what each lender has to offer, negotiate for the best deal that you can. Have the lender or broker write down all costs associated with the loan. Be sure to read the loan documents carefully and be certain that all spaces are filled in before you sign them. Always assume that any document you sign is a contract. If you do not fully understand it, do not sign it!