A Rundown of Equity Loan Scam Practices
By: Marlene, Guest Writer @ Home Equity Loans

When you take on a home equity loan, you have to remember to be prudent when choosing the right one for your needs. You mustn’t forget that there are many people out there who would try to cheat you out of your hard earned home equity. There have been many borrowers out there who have taken on home refinance loans and home mortgage loans and have found that they got the worst part of the bargain. Either they end up with high repayment rates or they lose their home due to huge balloon principal payments. Here are just a few more ways how home equity lender scammers will try their best to get your home and your money out of your hands:

Unwarranted mortgage fees and penalties – one scam of lenders is to continue adding fees and charges that are completely unwarranted. This is why you should always keep complete documentation on the payments that you make and the documentation on the dues dates of your payment. Before signing onto a loan, know which fees are included in the repayment of the loans. Lenders who scam you tend to add on additional fees on strange services. They may even charge you a late fee even though you have never paid late. Also check on your insurances because the lender may find that if you don’t have proper insurance coverage, they will charge you an extra fee for that alone.

Supposed home improvement loan – you want to make an improvement in your home, whether you want a new kitchen cabinet set or a remodeling of your bathroom area, but you don’t have the cash to do that. You might be approached by a contractor who will offer you a quick loan that will help you take on your home improvement project and he starts on the work straight away. After a few days, in the hectic atmosphere he will ask you to sign papers for your ‘small’ loan. Because you are in such a hurry, you miss out some blanks on the papers you are signing. A few days later, you find that you have signed a home equity loan you never wanted in the first place! To add to this, the home improvement that the contractor works on isn’t at all of the top quality you expected either! You are a loser both ways!

Signing your deed over to a third party > ??? >THINK TWICE.
You might not be able to make payments on your home mortgage loan and are about to lose your home. A lender offers to save you by giving you a home equity loan with low interest, but the fact that you are on the brink of getting your home foreclosed, suggests you sign the deed over to him as a temporary solution to not get your house taken from you. You sign over the deed and he never gets back to you on the home refinancing loan. You realize you have lost your home and may even end up paying rent to the lender who cheated you out of it! Be careful!

For more information on Fraud and Prevention, surf these helpful resources:
– Many details at ConsumerFraudReporting.org
– Surf to the bottom of this FBI.gov Page on Fraud Schemes