The sizzling housing market in this country coupled with looser lending restriction is allowing bold new scams that consumers haven’t had to face before. Homeowners are bombarded with a variety of pitfalls when facing the mortgage market today, the most common being predatory sales practices where homeowners are bamboozled into paying far more than they thought the transaction would cost them. Forgery of documents is becoming commonplace. Falsified credit histories and appraisal documents are turning up more in more in botched mortgage deals.
The fallout for homeowners can be a disaster. Financial hardship, credit problems, or even foreclosure due to unaffordable mortgage payments or balloon payments build into the loans. Some find out that they do not legally own their homes too late. To avoid these practices, homeowners need to be educated about mortgages. Scams seem to target Hispanic homeowners; taking advantage of the language barrier. However, even the best English speakers don’t always read or comprehend the documents they sign when at the mortgage table.
How do the scammers operate?
These scammers prey on people who are not familiar with lending policy and procedure. The make the documents overly complicated to hide their fraudulent nature and hidden costs. Once a mortgage loan is finalized and the sale is made, the agents involved get their commissions. Some charge fees anywhere from $200 to $5,000 for handling bogus paperwork.
To learn more about how you can avoid these scams and save money in the process sign up for our free course.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
