We learned earlier that there are a few things to watch out for when you are looking for a lender: 1) Lying on your applications, 2) balloon payments, and 3) house flipping. Unfortunately, there are even more illegal practices out there ready to suck you in. The purpose of these articles is to help you stay clear of these types of things.
Continuing in that vein, here is the next scheme. This one is done by contractors who will, supposedly, do work on your house. It is supposedly because sometimes they will not begin the work after you have signed blank papers without knowing exactly what is written on the papers if anything; if they have begun the work and you have refused to sign their papers without reading them, they will refuse to finish the work. The contractor in this case may have agreed to arrange for financing for the work the contractor will do on your home. If you aren’t sure what the contractor is doing, then do not sign any blank papers. This means never sign anything a contractor gives you without reading it because that is the only way you will know what your contractor is doing otherwise. A common practice is to have you sign the papers and disappear, so if it has not been made clear enough already, do not sign anything without reading it.
Sometimes insurance is used to take advantage of people who would like to obtain a loan. These lenders’ tactic is to slip various insurances into the loan. These insurances are not part of the loan, but these lenders like to make appear as if they are part of the loan and not an extra expense. If you are to say that you don’t want the insurance, which is the right thing to do, these lenders may make it appear as if it would be a huge hassle to remove the insurance. In this case, it is important to let them know you do not want anything extra and refuse to sign until it has been removed and read everything to make sure it happened.
For anyone who becomes desperate to avoid foreclosure, there are people ready to take advantage of you, too. The clue in this case is if the lender asks you to sign your deed over to them in order for them to refinance your mortgage. This is not a good idea. Do not sign your deed to anyone because it will essentially be their house after you do. Go to a legitimate lender and you may be able to keep your home.
Be wary of contractors who don’t want you to read your contracts, lenders who will slip extra things into your loan and those who want you to sign your deed to them. You may have a chance to save your house, but if you are not careful things can be made to be much worse.
Credit Secrets Revealed is an e-book that will show you some of the things you should look out for when searcing for a lender.
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