QandAs: Home

What is Home Equity Fraud?

Answer:
The entire point of making those monthly payments

on your home is to build up the equity in your home, but you can very quickly lose that equity by becoming a victim of Home Equity Fraud. Predatory mortgage companies prey on home owners looking to access the equity in their homes, either because of home improvement needs or because of financial hardship, offering quick cash in return for high interest rate loans.

These loans may seem reasonable on the surface, but hidden beneath the paperwork are exorbitant fees and charges that are immediately subtracted from the existing equity. With that equity gone, the Home Equity Fraud companies make even more money because now, most of the monthly payment goes toward the accruing interest rather than the principal of the loan.

Home Equity Fraud centers around counterfeit mortgage companies offering incredible deals, like subprime rates without concern for a person’s ability to cover the new debt, and as soon as the individual defaults on the loan, the once ‘reasonable’ interest rate is spiked up to interest rates that become impossible to manage. Home Equity Fraud thrives off of home owners’ desperation, so be wary and do your homework before considering refinancing your home.


	more Q&A sessions like this
	What is Loan Servicing Fraud? Why do the Majority of the Monthly Premiums go towards the Interest at the Beginning? What is Foreclosure Fraud? Should I Rent or Buy? Why are Jumbo Mortgage Rates higher than Traditional Mortgages? What is Repossession? What is a Prepayment Penalty? What is a Lien? What are the Consequences of Defaulting on a Personal Loan? What happens if my car is repossessed? What are the Job Duties of a Loan Officer? What is a Basis Point? What is a Mortgage Down Payment? Can I get a personal loan to pay for my car? How can I forecast mortgage loan interest rates? What is an Interest Rate? What is a Bond Rating?