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Protect Yourself from Lending ScamsEveryone is a potential a target of a scam.
Everyone is a potential a target of a scam. These individual who swindle people out of their hard earned money are predators and they will always continue to come up with new ways to rip off their victims. They do not care if you are rich, poor, young, old, healthy, or sick. Predators only care about separating you from your
money period. Many times if you are financially naive, elderly, or in debt, you are more likely to fall victim to scams. If something sounds too good to be
true be its probably a scam. Equity stripping is one scam that many elderly people fall victim to. Many times, these predators target the elderly, because the elderly are often on fixed incomes, but have equity built up in their homes. The predator is usually an abusive lender that convinces the homeowner they will get the loan if they only pad their income. Many times the victims even known that they will not be able to afford the payments. However, the scam artist is so persuasive they talk the homeowner into applying for the loan anyway. The lender then waits for the homeowner to default on the loan, then forecloses on the property. Some of these predatory-lenders offer to help the homeowner from losing their home, by offering to refinance the mortgage. Many times these are interest only loans. This means that the total amount borrowed becomes due as a balloon payment all at one time. When the homeowner can't pay back the entire amount, the homeowner ends up losing their home. This type of scam has even been applied to car loans and the outcome is the
same the car owner ends up losing his car. Flipping is another scam, which has become popular in the last few years. With this scam, the lender contact the homeowner, offering to refinance and allowing the homeowner to take some of the equity. After a few months, the lender calls again with yet another low rate, so you refinance again. However, this time the lender suggest that you increase your loan to pay off credit cards, take a vacation, or home renovations. Every time the homeowner agrees to refinance, the lender adds fees and charges and many times will even increase the interest rate. This increases the debt to the point that after a while, the homeowner cannot make the mortgage payment. This was only a small sample of the many different types of fraud being perpetrated by predatory-lenders and scam artists. The following are a few simple rules that may protect you against predatory-lenders: Don't agree to a home equity loan if you can't afford the payments.
Don't allow yourself to be pressured into signing any document.
Never permit a lender add any products into your loan that you don't want, need, or understand.
NEVER give out any personal information, especially your Social Security Number unless you are positive that you are dealing with a reputable business.
Always be very cautious of any lender who initiates contact with you.
If it sounds too good to be true it probably is a scam.
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