Title:
How To Avoid
Mortgage Scams
Word Count:
484
Summary:
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-Ha...
Keywords:
Mortgage
Scams,Reconveyance,Reverse Mortgages,Home Buying Seminars,
Article Body:
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.