How To Avoid Mortgage Scams

How to​ Avoid Mortgage Scams
With record numbers of​ individuals seeking home loans these days,​ it’s no surprise that scam artists have developed new ways to​ separate borrowers from their money .​
Mortgage scams are on​ the​ rise and typically target people who are overextended,​ have bad credit,​ or​ are in​ need of​ financial relief .​
These scams can cost a​ lot – in​ fact,​ they can result in​ the​ loss of​ your home .​
Guard yourself against con artists with a​ little background on​ common mortgage scams:
Slight-of-Hand Signings
There are documented cases of​ homeowners who unwittingly signed away the​ title to​ their homes because they were confused by paperwork .​
With any decision involving your finances,​ get everything in​ writing and insist on​ reading the​ documents carefully before signing .​
Ask questions and make sure you​ understand the​ answers .​
Be sure you​ never sign paperwork with blank spaces or​ allow someone to​ rush you​ through the​ process.
High-Priced Home-Buying Seminars
You’ve seen ads in​ the​ newspaper (and on​ bus benches) for those home-buying seminars or​ programs catering to​ people with less-than-perfect credit .​
If you’re considering such services,​ check out their fee structure first,​ and make sure you’re not buying into a​ scam .​
If you’re required to​ pay large fees in​ advance,​ chances are the​ service is​ not legitimate .​
Consult the​ Better Business Bureau before taking action.
The Reconveyance Racket
Say you’re struggling with mortgage payments or​ in​ foreclosure .​
a​ business or​ individual offers to​ buy the​ property and sell it​ back to​ you,​ once you​ get your finances back in​ shape .​
The process is​ called reconveyance,​ and there are legitimate companies offering these services .​
If you​ encounter a​ scammer,​ however,​ you​ could find yourself unable to​ repurchase your home.
Target: Reverse Mortgages
If a​ member of​ your family is​ considering a​ reverse mortgage,​ they should protect themselves against scams specifically targeting reverse mortgages and speak with a​ HUD-approved counselor first .​
Make sure they get at​ least three separate offers in​ writing,​ and that they understand the​ terms and conditions before signing .​
Remember,​ borrowers generally have up to​ three business days in​ which they can cancel a​ loan document.
Home Equity Hard Knocks
In this type of​ scan,​ the​ homeowner is​ approached by a​ contractor offering home renovations at​ an​ affordable price .​
When the​ homeowner protests that they can’t afford the​ work,​ the​ contractor suggests he arrange financing through a​ lender acquaintance .​
The homeowner agrees,​ the​ contractor commences work,​ and then presents the​ homeowner with a​ bunch of​ paperwork .​
Some of​ the​ papers may be blank or​ incomplete and the​ contractor threatens to​ walk off the​ job unless they are signed immediately .​
After the​ fact,​ the​ homeowner discovers they’ve applied for a​ home equity loan with high rates and accompanying fees .​
At this point,​ the​ contractor has all the​ leverage because the​ work is​ underway and he’s probably received a​ kick-back from the​ unscrupulous lender.

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