If you are interested in a mortgage loan modification option then you should know about the fraudulent schemes aimed at homeowners. Law enforcement offices as well as many government agencies are currently advising homeowners not to pay any money in advance for promises of mortgage loan modification since none of the lawful mortgage lenders would charge any fee in advance for this purpose. Over 3,000 mortgage fraud cases are being investigated nationwide and this is twice the amount for the same period a few years ago. To elaborate, some recent mortgage fraudsters used over $100million dollars they scammed to fund businesses, buy private helicopters, mansions, and posh cars.
Some of the popular scams include:
Loan Flipping: This is when a loan officer contacts you and promises to generate cash for you by refinancing your home. Although this may be true, you will then be bombarded with expenses such as appraisal fees, closing costs, and any other fees incurred.
Foreclosure Refinancing: This is aimed at people facing foreclosure. The loan officers will tell you that they can save your home by refinancing. They will then ask you to sign the deed in their name and they will pay the bank. Then you should pay a small monthly fee to them until that is paid off and they will sign the deed back into your name. This never happens. If you sign over the deed you will no longer own your home and you will lose everything.
Home improvement loans: A contractor will try to show you surveys that state your house needs some major repairs immediately. They will help you get a home equity loan to pay for the well-needed repairs. They will always act as though they have connections to get this loan immediately. You will then need to quickly sign many documents and once you have the loan, the contractor disappears and you will be stuck with these payments.
There are many scams that are put in place by unscrupulous individuals and homeowners are the primary target. Some will try to trick homeowners into transferring the title of their homes into other names. Another one will try to get homeowners to pay a fee and then declare themselves bankrupt hoping that the court will allow them to keep the property. This is not so. Courts rarely allow such persons to keep their homes. Others will involve the charging of huge fees to supposedly secure a mortgage loan modification and afterward, no assistance will be provided.
To protect yourself from these kinds of traps, you can do a few things such as read all the documents you get before signing. Make sure you understand every document and all terms used. Use a loan officer that has been licensed by the state and take your time to think about the opportunities that will be placed in front of you. If the person is hurrying you, it is probably a scam. Go slowly and make sure your questions are being answered.