Watch Out for Mortgage Scams
By Francine L. HuffMortgage Credit Problems Columnist
Mortgage fraud is
growing, as more homeowners with bad credit have become desperate to make their
mortgage payments. Complaints to the Better Business Bureau about mortgage
fraud are rising across the
“Mortgage Rescue
Companies”
Some people with bad credit are being taken for a ride by so
called “mortgage rescue companies” that promise to negotiate with their lender
to reduce their monthly payments or avoid foreclosure. While there are
companies that can help in this area, some are asking for fees upfront, but
give homeowners little or no help, pushing them into an even deeper financial
hole. If you have bad credit and are thinking of using a mortgage rescue
company, you should receive a notice of your right to cancel the contract and a
statement of the terms and exact services you can expect. However, your best
bet is to call your lender or a HUD counselor--it’s free.
Inflated Payoff
Amounts
Some scams may involve telling homeowners to stop paying on
their mortgage and avoid contacting their lender while the rescue company makes
arrangements for a plan to catch up on missed payments. But some of these rescue
schemes ask homeowners for more than the actual payoff amount to get their loan
out of arrears. Because the homeowner has been instructed not to contact their mortgage
lender, they end up paying a lot more than they should, allowing the scammer to
pocket the money. Again, call your lender. Don't let shame or fear keep you
from making that call--these scammers count on it!
Equity Stripping
Another scam involves convincing homeowners to sign over the
title--sometimes unknowingly--to their home. Michael Sichenzia, chief operating
officer of Dynamic Consulting Services, told CNN Money that, "the scammer
promises to save the home by taking title, renting it to the owner and selling
it back sometime later. Instead, he strips the equity by charging excessive
fees, doing phony renovations and not making the mortgage payments."
The bottom line is that if you have bad credit and are
having trouble paying your mortgage, it's always best to contact your lender
first to see if you can negotiate a deal. If you really need help, look for a
free credit counseling service that is approved by HUD.
About the Author
Francine L. Huff is a
freelance journalist and the author of The
25-Day Money Makeover for Women. She
has appeared on a variety of TV and radio shows.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
Share This Article:
 del.icio.us |
| |  Digg |
| |  Reddit |
| | 
|
| | | |
Other Recommended New Home Loan Articles
