Homeowners are constantly barraged by all
types of solicitations from companies trying
to tap into their home equity. Often, these
lenders use deceptive tactics and pay little
regard for your long-term benefit. Below are
some common scams to watch out for:
Income Padding
Income padding involves a lender
encouraging you to exaggerate your income in
order to get you approved for a home equity
loan. The lender or broker isn't concerned
that you will not actually be able to make the
monthly payments, because once the loan is
extended, the creditor holds the home as
collateral, and is able to foreclose.
Loan Flipping
Loan flipping occurs when a lender
repeatedly encourages you to refinance your
mortgage and borrow more money. Mortgage
brokers make their money by closing on as many
loans as possible and often encourage
homeowners to refinance even when it is
detrimental. There are often high hidden fees
involved in the loan and a slightly lower
monthly payment may still mean a significantly
higher amount of total debt and longer loan
term.
Deceptive Loan Servicing
Many times, lenders fail to provide you
with all of the information regarding fees and
costs associated with a new loan. You may be
looking for a lower monthly payment or a
better interest rate, but often aren't told
the long-term obligations that you are
undertaking or are deceived about hidden costs
and fees.
The Home Improvement Loan
Watch out for contractors offering to do
work on your house and stating that they can
arrange all the financing for the work done on
the property. Later, you find out that you
have agreed to a home equity loan that could
jeopardize your rights to own the home. With a
lien on your home, the contractor has little
motivation to do a good job on the home
repairs and some even disappear.
Signing Over Your Deed
Beware when a lender offers to help you
bring your mortgage payment current in
exchange for you signing over the deed to your
home. Often, the lender will allow the
homeowner to remain in the property as a lure
to sign over the title. Once the transfer is
completed, you have signed away your ownership
interest and have simply become a tenant in a
house that you no longer own.
Don't Take Chances.
If you have debt problems,
call today for a FREE Debt Consultation.
662-844-7949
24 Hour Appointment line:
662-842-HELP(4357)
