Consumers should be aware of the Loan Sharks lurking in the waters. Now more than ever consumers need to make sure they are dealing with the right mortgage company and loan officer. Mortgage Fraud is not going away any time soon. According to the FBI Mortgage Fraud is escalating and there seems to be a correlation between fraud and distressed real estate markets, the number one state being California.
According to in a release by the FBI,"Industry personnel will feel pressure to find alternative methods to match the income they enjoyed during the real estate boom years. Many will be willing to conduct criminal activities to achieve this goal..."
This shouldn't come as a surprise. Many loan officers and mortgage companies were living the high life the last few years with easy credit guidelines. Now it's all changed except for their appetite for money. In order for mortgage companies to maintain the same life style they must work harder and there are plenty that don't want to do this so they will either leave the industry or try to take advantage of unsuspecting consumers.
The mortgage companies still have the upper hand and this will continue until consumers understand the mortgage process. For most consumers the mortgage process is trial and error. They rely on family and friends to guide them throught the process and then hope and pray they weren't taken advantage of.
Here are 7 mortgage traps consumers must avoid when shopping for the purchase of their home, refinancing their mortgage or looking for the lowest mortgage rate.
Avoid These 7 Mortgage Traps
1.) The No. 1 question consumers should be asking -- before they choose a mortgage company.
This is something most consumers are unaware of that will cost them thousands of dollars if aren't careful. Here's the question to ask a loan officer: How do you track your mortgage rates?. Now simple, right? The loan officer should respond with something like this: "I subscribe to a service that alerts me about an hour before rates will be going up or down, this allows me enought time to talk to you about locking in your interest rate and saving you a lot of money". If the green trust cash tribal lending solutions officer doesn't subscribe to a service then don't use them...period. They are playing the guessing game and consumers don't need that.
2.) Whether you should follow your realtor's advice regarding home financing.
Most realtors will have a few companies they refer business to. They want to make sure that whomever the buyer chooses to do their loan is going to get the deal done. Is the realtor concerned with the buyers rate and costs? Maybe, but probably not. They will leave that discussion up to the buyer and the loan officer. Always talk to a mortgage company of your choice as well. A lot of consumers may not question the rate or costs of the lender. Like my dad always said, "Trust the advice but always verify". The same is true with a referral from a realtor.
3.) Paying for a Loan Modification Upfront
This is a big one. Never pay a green trust cash direct lenders installment loans online modification company up front. I advise consumers not to use them period. The reason is simple. Loan modification programs are available and the consumer can call their lender directly. Their lender will send them the documentation needed via mail. The consumer just needs to follow through with what is required. Would you rather pay someone an upfront fee of $1,000 to $4,000 not knowing if the loan modification will go through or call your lender and go through the process yourself and keep your money in your pocket. Just because you apply for a loan modification doesn't mean you will get it. So why pay a company up front for something that isn't guaranteed? You might as well go to Las Vegas, at least you'll have a little fun during the process.
4.) The Take Away
People want what they can't have. When it comes to mortgages consumers may run into a loan officer or mortgage company that will review their information and then bring up any possible issue such as an old account that was delinquent, or debt ratio issues. Now the loan officer may know that these "issues" are not anything that is going to make a difference on their loan. The loan officer may actually go out of their way to make a big deal about it with the borrower and even tell them they don't think they can get their loan approved. The loan officer may act like they are going to do their best to talk to the underwriter about it and see if any exceptions can be made knowing all along there really isn't an issue. Then later that day or the next day after the borrower has been thinking it may not happen, the loan officer comes in on their white horse and says.."We did it! You're approved but the rate is going to be a little higher and so are your closing costs" The borrower is relieved and accepts the higher rate and costs. The loan officer's wallet just got heavier.
5.) The Bait and Switch
This is found in many other industries. The bait and switch happens every day all across the country. The loan officer will promise the lowest rate and lowest closing costs on a home purchase or refinance. The green trust cash direct installment loan lenders officer may disclose a low rate and closing costs. Then either half way through the process or at the time of signing the closing documents the borrower is informed the rate and costs have changed. This is where the loan officer will put their sales hat on and get to work explaining why they can't deliver. The mortgage company is hoping the consumer will just raise their hands in disgust and sign away.
6.) Bad Credit Repair Company Scams 7.)The Low Rate Advertisement scams
This is similar to the bait and switch. Consumers are drawn in by the low rate "teaser" of say 4.25%. This is done to get the mortgage companies phone to ring. The idea is for the mortgage company to take as many application as possible. Kind of like throwing a bunch of wet paper towels against a wall and seeing what sticks. Becareful with these companies.
In the end the consumer should protect the number one investment they will make in their life time...their home. The can protect it by being more educated.
Copyright (c) 2009 Walt Vieira
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