Homeownership is one of the biggest dreams of many Americans. Due to record numbers of homeownership and cheap mortgage rates, many homeowners are prime targets for scams. Therefore, I'd like to take the opportunity to point out three of the top current real estate scams to help homeowners, buyers and sellers from losing thousands of dollars or their home.
The top three real estate scams that can be found right now include identity theft via mortgage request, loan flipping and the old bait and switch.
The bait and switch technique is a fraudulent method where a loan product is publicized at a beneficial rate (bait). Later, the product or rate is subsequently changed for the gain of the lender (switch). For example, one interest rate is guaranteed to you at the time of selling a loan, but a higer rate is given at the time of closing. This practice is deceitful and illegal.
When obtaining a mortgage quote or getting pre-approved for a mortgage, many consumers believe that their financial details are secure. However, on many occasions, your financial details can be hacked within 24 hours of your credit bureau inquiry and even your loan officer is unaware of your financial details being swiped away.
Loan flipping is another type of mortgage scam that is common in the real estate industry. Loan flipping denotes frequent refinancing of a mortgage within a short time, giving very small gains to the borrower. Lenders who flip loans ask too much for an origination fee with every consecutive refinancing. These fees are usually asked for based on the whole loan amount, not only on the increased amount summed up with the loan principal through refinancing.
If you are considering a mortgage refinance, a home equity loan or buying a home, you should find a lender you can trust. It is very important to shop around and do your homework before making a final decision and never give your personal details until you are confident that the individual or company you are talking to is someone you can trust.
To protect yourself from being scammed, the best offense is a good defense. Research and make inquiries often.
Keller Williams Arizona Living Realty ~ Realtor® Cheryl Westwood
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