Equity Loan Scams

Equity loan scams –

Let's make it abundantly clear that a lot of lenders on the equity loan marketplace are legitimate lenders; however, a few lenders are taking advantage of the poor and the ignorant. These underhanded lenders present catchy loans, yet fail to advise the borrower about buried expenses or balloon charges. Buried charges are routinely stripped from loans, since the APR is a supposed safety net to the borrower that weeds out buried costs. Abusive lending practices range from equity stripping and loan flipping to hiding loan arrangements and packing a loan with excess fees.

Equity Stripping is one of the leading scams on the loan marketplace. Lenders will attempt to seperate you of your hard earned money by stripping most of the equity from your home. The lenders engaging in equity stripping will routinely present to borrowers (Wow, what a deal!) deals, leading you to swear that you are saving money. Because equity stripping is becoming a huge industry, the Fed's urge homeowners to lookout for equity stripping, plus being aware of lenders that are offering loans that reach higher than your earnings. The loan is accepted, because the lender reports your wages as higher than it actually is.
The feds also instruct borrowers to stay conscious of loan flipping, which is the process of switching loans on regular basis and requesting bigger amounts of money on each refinance applied. Loan flipping functions this way: When a customer fails to make payments on a loan, the lender offers to renew the loan and excuse any missing payments. If a lender is browbeating you to sign a contract, you will need to approach another lender, since pressuring borrowers is a definite warning that the lender is out to take you for a ride.