Avoiding Mortgage Scammers
Many people blame the recent explosion of mortgage foreclosures and national mortgage industry trouble on greedy buyers moving into homes they cannot afford, but the simple truth is that an abundance of factors have played their hand. Equity thieves are making matters much worse by conning homeowners who have fallen behind in their payments. Once a homeowner or mortgage borrow falls behind, the scammers contact them and promise to help them secure new financing in order to save their mortgage. But for some reason, it does not quite work out for the homeowner.
The scam is extremely complex, involving many parties including the appraiser of the home, mortgage broker, and even straw borrowers, and it is known in the world of mortgages as “Equity Stripping.” Basically, the scammer convinces the homeowner to sign the title of the house over to a posing buyer, who will take out a new mortgage for all of the homes current value. The con artist makes it appear as though the paperwork only promises the “buyer” the right to rent the home with the option to buy, but the rabbit hole doesn’t stop there.
After closing costs on the new mortgage, there is a sizeable amount of money left over because of the equity already in the home. The broker pockets this money, using a second straw buyer to purchase the home at the appreciated value of the home. After closing this these closing costs and fees, the scam broker then pockets another check for the amount of the appreciation on the home. All the while, the original homeowners know nothing about the second buyer, nor do they know about the fact that payments have not been made by the first straw buyer. Without a quib, the home goes into foreclosure, and the homeowner is left without a home or any of the equity they might have had.
This is an incredible lucrative scam that is popping up hundreds of cases around the country. It is a basic violation of trust, against people who are so incredibly desperate to save their home from foreclosure. They want to believe there is an easy way out, and are usually willing to suspend their disbelieve for the possibility that it might actually work. One way to protect against this kind of fraud is to avoid mortgage brokers that approach you during time of foreclosure. Do your research and explore the background of particular mortgage brokerages or individuals so that you trust their knowledge and integrity completely. This may be on of the most crucial financial decisions you ever make. Take your time and make the right choice.
About the Author: Peter Dellane is the President of Ability Mortgage Group, LLC, A leading Maryland Mortgage company, offering low costs zero point mortgages. For more information on Mortgage Maryland rates and programs please visit www.marylandsmortgage.com.
The scam is extremely complex, involving many parties including the appraiser of the home, mortgage broker, and even straw borrowers, and it is known in the world of mortgages as “Equity Stripping.” Basically, the scammer convinces the homeowner to sign the title of the house over to a posing buyer, who will take out a new mortgage for all of the homes current value. The con artist makes it appear as though the paperwork only promises the “buyer” the right to rent the home with the option to buy, but the rabbit hole doesn’t stop there.
After closing costs on the new mortgage, there is a sizeable amount of money left over because of the equity already in the home. The broker pockets this money, using a second straw buyer to purchase the home at the appreciated value of the home. After closing this these closing costs and fees, the scam broker then pockets another check for the amount of the appreciation on the home. All the while, the original homeowners know nothing about the second buyer, nor do they know about the fact that payments have not been made by the first straw buyer. Without a quib, the home goes into foreclosure, and the homeowner is left without a home or any of the equity they might have had.
This is an incredible lucrative scam that is popping up hundreds of cases around the country. It is a basic violation of trust, against people who are so incredibly desperate to save their home from foreclosure. They want to believe there is an easy way out, and are usually willing to suspend their disbelieve for the possibility that it might actually work. One way to protect against this kind of fraud is to avoid mortgage brokers that approach you during time of foreclosure. Do your research and explore the background of particular mortgage brokerages or individuals so that you trust their knowledge and integrity completely. This may be on of the most crucial financial decisions you ever make. Take your time and make the right choice.
About the Author: Peter Dellane is the President of Ability Mortgage Group, LLC, A leading Maryland Mortgage company, offering low costs zero point mortgages. For more information on Mortgage Maryland rates and programs please visit www.marylandsmortgage.com.
Labels: maryland mortgage company, mortgage scammers, mortgage scams, trustworthy mortgage broker
posted by Peter Dellane at
5:29 PM
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