Realize Mortgage Scams

Despite much publicity in recent months, regarding mortgage scams, mortgage scammers are still at their game. Mortgage scammers, frequently, target the most vulnerable members of society like the elderly, consumers with bad credit, consumers in dire financial situations.

Though most of the fraudulent lending happens to consumers trying to refinance their house or consumers looking for a home equity loan, in recent years, home purchasers have been victimized in large numbers. In 2004, the FBI published a report announcing that mortgage fraud had tripled as 2001.

The most common lending scams are:

1. Lenders pursue borrowers really aggressively and push the customer to close the loan really quickly before the borrower has time to acquire informed or read the fine print.

2. Lenders use the bait and switch technique. frequently consumers are promised one low rate of interest during the initial negotiations; however at closing, consumers check out that the rate of interest is higher or that there are hidden fees that were not disclosed during the early negotiations.

3. Rescue loan is one of the most despicable for of mortgage lending scams. Usually, customers in dire financial situations are targeted with this type of loans. With this type of loan, unscrupulous lenders, frequently ask the consumer to 'temporarily transfer' the deed of the property to them while waiting for the loan to be approved. These predators rarely produce the promised loan once they take the legal possession of the home, and worst, they move to sell the property and evict the home owner.

Consumers should be really wary of promises that sound too good to be true. The best protection to prevent mortgage scams is to acquire educated about the types of mortgage loans in the market. Taking time to learn the basics of mortgage lending would assist you make good options when shopping for a mortgage.