Home Equity Loan - Beware of Equity Stripping Scam

The market for mortgage refinancing have been lively during the last few years. The roar in business can be attributed to interest rates that have got got been at or near historical lows, and to lenders who have more than money to impart now that they aren’t investment in risky technical school pillory anymore. Low rates and congenial lenders are certainly good for consumers who might be interested in refinancing their home or taking out a home equity loan. Those considering such as loans should be aware that the flourishing market for refinancing have led to increased competition among lenders. And when the competition increases, so makes the number of lending scams.

These days, lenders are surprisingly aggressive. It’s not unheard of to have got people knocking on your door, asking if you would be interested in refinancing your home. Lenders that are eager to impart you money are great, provided that you are actually interested in borrowing. If you are, then you should be careful Brand an attempt to thoroughly look into your lender if you make not have got a former human relationship with them.

A cozenage that is increasingly common in today’s market is a lending strategy known as “equity stripping.” Type A homeowner uses for a home equity loan, or perhaps uses to refinance their home. A lender then encourages the homeowner to borrow more than money than they can afford, and perhaps “assists” by falsifying some information on the application. The lender makes this with hopes that the homeowner will default on on the loan. When the homeowner defaults, the lender forecloses on the property, sells the property, and maintains the home’s equity as profit.

This is one of many cozenages that tin currently be establish in the mortgage industry, and one that tin be avoided if possible borrowers will take the clip to make a spot of research before sign language on the dotted line. Homeowners who are interested in refinancing their home should look into prospective lenders before doing business with them. Contacting friends who have got recently refinanced or the local Better Business Agency would be a good topographic point to start. Lenders who name you out of the bluish or knocking on your door are probably best avoided.