On The Clock: Jim Parrott, Senior Advisor for the National Economic council Topic: The President's mortgage refinance proposal in 60 seconds or less
mortgage-investment.blogspot.com On the Clock - Mortgage Refinance
If you're falling behind on your mortgage payments, or if you're struggling with growing credit card debt, utilities, and other bills, you may become the easy target of dishonest mortgage lenders or brokers hoping to profit. Solicitations come in a variety of ways-by mail, phone, radio, newspapers, flyers, and even home visits-offering to provide refinancing, fast cash, and a way out of debt. Refinancing to obtain cash translates into a larger loan and most likely means higher interest rates and high-priced refinancing fees. One form of predatory lending con artists use on desperate homeowners looking to refinance is called "loan flipping."
Loan Flipping
Earning trust by using their knowledge and experience, a mortgage lender can talk a homeowner into refinancing their mortgage, even though they'll gain little from the transaction in the long run.
Ballon Payments
A serious twist with loan flipping occurs when a balloon payment is snuck into the fine print.
Get Help
Scammers promising fast cash and an easy refinance can successfully target consumers overwhelmed by debt and in danger of losing their homes. They know people are willing to do just about anything to keep their home. It's a good idea to seek help and have someone else review the paperwork before signing anything. Even at the last minute, you can always walk away from a bad deal.
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