How to Stay Away From Mortgage Scams
How to Stay Away From Mortgage Scams
With a record number of people looking for home loans these days, it's no wonder that con artists have devised new ways to defraud investors. Mortgage fraud is on the rise, and it usually targets people who are overextended, have bad credit, or are in desperate need of money. These scams can cost a lot of money, and in some cases, they can even lead to the loss of your house. With a little context on popular mortgage scams, you can protect yourself from con artists:
Signings with a Light Hand
There have been reported instances of homeowners signing away the title to their homes unknowingly due to paperwork confusion. Get all in writing before making any financial decisions, and focus on reading the documents thoroughly before signing. Make sure you understand the answers by asking questions. Never sign paperwork that has blank spaces or let anyone hurry you through the process.
Seminars on Buying a House for a Lot of Money
You've seen advertisements in the newspaper (and on bus benches) for home-buying workshops or services for people with bad credit. If you're thinking of using such services, look at their fee structure first to make sure you're not falling for a con. If you have to pay a big fee up front, the service is probably not valid. Before taking any action, check with the Better Business Bureau.
The Racket of Reconveyance
Assume you're having trouble making your mortgage payments or are facing foreclosure. A company or person agrees to buy the property and then resell it to you once your finances are in order. The procedure is known as "reconveyance," and there are legal companies that provide it. However, if you fall victim to a con artist, you can be unable to repurchase your house.
Reverse Mortgages are the goal.
If a member of your family is thinking about getting a reverse mortgage, they should be aware of reverse mortgage fraud and talk with a HUD-approved advisor first. Before they sign, make sure they get at least three written proposals and that they understand the terms and conditions. Remember that borrowers usually have up to three business days to terminate a loan agreement.
Hard Knocks When It Comes to Home Equity
In this form of scan, the homeowner is approached by a contractor who offers low-cost home repairs. When the homeowner says they can't afford the job, the contractor suggests arranging funding through a lender he knows. The homeowner agrees, the contractor begins work, and the homeowner is then handed a stack of paperwork. Any of the papers could be blank or unfinished, and the contractor has threatened to leave the job if they are not signed right away. The homeowner learns they've applied for a home equity loan with high-interest rates and fees after the fact. Since the work is already underway and he's likely got a kickback from the unscrupulous lender, the contractor now has complete control.
Comments
Post a Comment