NJ Mortgage Consultants Advise on Avoiding Financial Traps

Lending transactions often appear to be complicated. As a result, borrowers tend to rely on the expertise of professional NJ mortgage consultants for guidance through the process. But what happens if the "professional" you choose is actually a scam artist or a predator looking to push you into a costly or risky situation? Therefore, it is imperative that you know the signs of a potential scam so that you don't become the victim of one. It's especially important in these challenging economic times to recognize and avoid these traps because it can damage your credit, cause financial hardship, and in some cases, even cost you your home. In addition, seeking out reputable, NJ mortgage consultants will be an extra insurance policy against fraud.

NJ Mortgage Consultants Say: Recognize the Signs of Predatory or Abusive Lending

Home marketing specialists send offers to your home every day - offering lines of credit, home equity loans, mortgage life insurance, and refinancing. It's important to understand the difference between legitimate opportunity and predatory or abusive lending. Here are some signs that should raise suspicions and something that reputable NJ mortgage consultants will point out:

• Repeatedly encouraging you to refinance your loan within a short period of time ("mortgage flipping") and charging high points and fees with each refinance. The company may claim that you're getting better interest rates each time, but be sure to consider how much you’re paying in additional fees and interest with each new loan transaction.
• "Packing" a loan with single premium credit insurance products, such as credit life insurance, and not adequately disclosing it inclusion, cost or additional fees associated with insurance.
• Charging excessive rates and fees to borrowers who actually qualify for lower rates and fees.
• Including "balloon payments" - a large one-time payment - at the end of a payment schedule that disguises the true, higher-than-expected cost of the loan.

NJ Mortgage Consultants: Scams to Avoid

The following are a list of scams to avoid as per reputable NJ mortgage consultants:

• MHA Opportunists: Someone asks to you pay a fee in exchange for a NJ mortgage consultant service or modification of a delinquent loan.
• Home Title Scan: Someone offers a loan or fast cash exchange for the title to your home. You continue to pay the mortgage, but you are not longer the owner of the property.
• Equity-skimming foreclosure "Rescue" scam: Someone offers to pay your delinquent mortgage by purchasing your home. In turn, you can stay in the home as a renter with the option to buy back the house when your financial situation improves. Then the “buyer” cashes out your hard-earned equity and disappears.
• Foreclosure rescuers: They pose as professional NJ mortgage consultants who promise to stop foreclosure, but often at a high price. When they don't deliver, you are left short on cash and out of the home.
• Home improvement loan scam: A contractor requires money up front, but doesn't complete the work. In other cases, the contractor completes the work, but for well above the original estimate.