Little Known Home Finance Scam Uncovered - Property Owners Beware
In today's uncertain mortgage market, it's all too easy for people with money problems to fall victim to home finance scams. Predatory lenders pop up offering money, the ability to keep your home and a way to avoid foreclosure. Desperate people are only too willing to believe their offers of help, and a property finance scam begins. How can you protect yourself from predatory lending?
Here are seven sure fire steps to avoid becoming a victim of a property lender scam:
- Beware unsolicited offers of help.
If foreclosure begins on your home, or even if you begin to fall behind on your mortgage payments, your lender may report this to the credit bureaus. Once this information is reported, predatory lenders can easily find your personal details and contact you to offer help. Some predatory lenders even go as far as to show up at your front door, offering you the aid you so desperately need. Other house financing scams begin by an unsolicited email. If you didn't initiate contact, beware any company or organization that contacts you. - Never sign documents you don't understand.
If you're negotiating a contract to repay your mortgage, refinance your house or avoid foreclosure, get an attorney to review your paperwork before you sign. If you can't afford an attorney, contact a HUD-approved housing counselling agency to ask for referrals to find an attorney who can review your documents for free or a reduced cost. Never sign over your deed. Don't let anyone pressure you into signing a document. - Don't falsify information or sign blank documents.
If a lender asks you to 'adjust' your income and expense numbers, falsify information or sign blank documents - don't do it. Falsifying loan documents is illegal, and you can be prosecuted for fraud. If you sign a document with uncompleted spaces, you have no way of knowing what the lender will insert into those spaces and again could be liable for fraud. The predatory lender could also fill in blanks in paperwork to complete property finance scams, even including having you deed your property over to the lender. Don't do it. - If someone tells you they provide your only option to save your home, walk away.
You always have options. No legitimate lender will tell you that there is no other way for you to finance your home or repay deficiencies. If a lender is pressuring you into signing a deal with them by using threats that you 'won't be able to get a loan elsewhere,' chances are good that they're a predatory lender charging you a high interest rate and possibly trying to commit a property financing scam. - Learn about the property before you buy.
Always hire a licensed home inspector to investigate the property before you purchase. Get an agreement in writing as to who is responsible for any repairs - you, or the seller. Find out how much other houses in the neighbourhood are worth, and make sure you're not paying too much for your property. - Never borrow more money than you can afford to repay.
This one seems obvious, but it's amazing how quickly a high-pressure sales pitch can convince you that you can afford more than you thought. Beware these high-pressure pitches. Before you go shopping for a home (or a mortgage!) know how much you can afford. When you shop rates, find out how much your total monthly payment will be - including taxes, insurance, interest and PMI insurance, if applicable. Some lenders neglect to mention these fees, and then you're surprised by a payment several hundred dollars per month higher than you thought it would be. - If you get to closing and find different terms, don't sign the documents.
Some predatory lenders commit easy home finance scams by changing the terms of your mortgage at closing. It's not uncommon to find that your mortgage is for a higher rate than you were previously told, or to discover additional fees you didn't know about. If the lender changes the terms at closing, don't sign. It's in your best interest to protect your investment, and you're off to a bad start if your rate is unexpectedly high or you suddenly discover an unexpected pre-payment penalty.
Little-Known Home Finance Scams.
Predatory lending scams take many forms. Look out for equity stripping, balloon payments, loan flipping and other house finance scams. These scams take many forms - so many that it takes pages to detail all the different types of property finance scams. If you want to learn all the details of these different types of home finance scams, check out the Credit Secrets Bible. In addition to describing the different types of home finance scams in detail, the Credit Secrets Bible is full of in-depth tips to protect yourself from each type of scam.
