Beware of Mortgage Scams
For most people, their home is their biggest purchase, and they'll do practically anything to protect it. Unfortunately, that's the reason why fraud artists target homeowners with high-cost and often illegal mortgage offers.
In one common example, con artists promise to erase a bad credit history or make easy loans to people with spotty credit histories. "Most of these offers involve exorbitant fees, come with hidden terms or never provide the promised money," said Michael Benardo, manager of the FDIC's Financial Crimes Section.
Mortgage foreclosure fraud is on the rise, with thieves posing as lenders or housing counselors offering to "help" people at risk of losing their homes to foreclosure. More than likely, the consumer pays high upfront fees for questionable services, and in the worst cases, thieves have tricked people into signing over ownership of their homes.
How can you avoid these types of fraud? "Try to deal only with businesses and other organizations you already know or that have been recommended," said Benardo. He added that it's safe to assume that any offer that sounds too good to be true, especially one from a stranger or an unfamiliar company, is probably fraudulent.
The New Climate for Mortgage Borrowers
Credit may be tougher to get, but good loan programs are still available. Even people having difficulty paying their mortgages have options for saving their homes from foreclosure.
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