How To Spot And Avoid Equity Scams
by Emanuele
Allenti
Most lenders on the equity loan marketplace are legitimate lenders; however,
a few lenders are taking the less fortunate for a ride. These unscrupulus
lenders offer appealing loans, yet fail to tell the borrower about hidden
charges or “balloon” charges. Hidden charges are often stripped from loans,
since the APR is a supposed security to borrower that weeds out hidden fees.
“Equity Stripping” is one of the leading scams on the loan marketplace. The
lenders engaging in “equity stripping” will often present to borrowers (too
good to be real) deals, leading them to believe that they are saving money.
Thus, once the borrower agrees to the contract, the lender will pose new charges,
high interest, and other fees that puts weight on the borrower, until he or
she breaks and fails to make payments on the mortgage. The lender then repossesses
the home, selling the house for profit while the borrower is standing on the
corner, wondering where he will live next.
Thus, the Federal Government has provided information to help borrowers avoid
losing. Since equity stripping is becoming a huge industry, the Fed’s advise
homeowners to watch out for equity stripping, including paying attention to
lenders that are offering loans that reach above your wages.
The feds also advise borrowers to stay alert to “loan flipping,” which is
the process of switching loans regularly and requesting larger amounts of
cash on each refinance applied. If a lender is pressuring you to sign an agreement,
you will need to find another lender, since pressuring borrowers is a surefire
tip that the lender is out to take you for a ride. You will also want to consider
PMI, which is personal mortgage insurance, which is a requirement; however,
few lenders attempt to charge for additional coverage that is not needed.
Thus, homeowners, especially the less fortunate, should adhere to advice and
read details of any loan offered thoroughly.
Emanuele Allenti is the owner of home
equity loans and best
home equity loans websites.
Article Source: Sunflower Articles
