The housing market is ripe for buyers and sellers of all types, and with such high activity in the industry, it’s always best to be on the lookout for potential predators and scams.
ABC News recently revealed five tips for prospective borrowers on how to avoid getting scammed when going through the financing process.
The first and most effective tactic the news source states is to read the fine print and do your research before finalizing a mortgage deal. Scammers know what you want to hear and that is “ultra-low mortgage rates” and “no down payment.” But if it doesn’t add up and it doesn’t make sense then there’s probably a good reason why.
For current home owners, loan modification should be treaded on lightly. One big red flag is an upfront fee requirement. This is a sure fire sign of a scammer and should be avoided at all costs as loan modification does not require upfront fees of any kind.
Also, while mortgages can be transferred to different hosts through the life of the loan, the borrower should be wary of just giving up mortgage payments to a new party just because. Under federal law, when the servicer of a loan changes they must be properly handed off with full visibility to the borrower. This entails a formal “goodbye” letter from the original servicer followed by a “greetings” letter from the new servicer.
Another tip, geared mostly toward the elderly, is staying away from reverse mortgage scams. Reverse mortgages are generally offered to home owners age 62 or older who want to put the remaining equity in their home to use while saving for retirement. Chris Moessner, former president of Moessner & Associates in Washington, D.C., states that these scammers use eye-popping marketing campaigns, generally, and offer empty promises galore.
Lastly, the news source states that borrowers should avoid lease/buy-back agreements at all costs. This is a popular breeding ground for scammers as most states make foreclosures public record.
Contact us today to learn more about your rights as a borrower.
+Patrick Glaros empowers people to find their best home loan option. Through planning and education, and a goal-oriented approach, Patrick and the team at Dallas Mortgage Planners have one common goal: Help clients make an informed decision to choose the best home loan for their unique situation. Find other articles written by Patrick.
