We just attended a continuing education course about lending practices. Some very important points were stressed in this course:
- Know your lender and title company! The Federal Trade Commission has brought 21 actions against mortgage lenders in the last decade. After a nationwide review in June, the FTC has sent warning letters to more than 200 advertisers and media outlets, stating that some mortgage loan claims being made on web sites, newspapers and unsolicited emails may violate federal law. Even with the recent shake-up due to the sub-prime mortgage mess, scam artists are still practicing. Be careful, and read the fine print! If the loan terms sound too good to be true, they probably are. Protect yourself by using a reputable, local lender and title company, and don't respond to come-ons.
- There are other housing related scams, such as ads placed in newspapers asking for investors. They aren't asking for your money, only your financial information... you could end up a victim of identity theft with ruined credit. There are also many unscrupulous pitches to buy you out. Again, be careful with unsolicited offers.
- If you're having trouble paying your mortgage, don't ignore the problem. Although it's unlikely in this market, technically, lenders can start foreclosure proceedings once you've missed one payment. However tempting it may be to ignore the situation, don't do it. Talk with your lender as soon as you know there is a concern. Explain your predicament, and discuss all options. Open all the mail your lender sends. Seek free help from foreclosure prevention organizations (please be sure to thoroughly check out any financial counselling services before you commit to their services).
Some resources:
To report mortgage fraud: report directly to Fannie Mae via www.efanniemae.com or call the Fraud Tips Hotline at 800-732-6643.
Penrose Library at 20 N. Cascade Av. in downtown Colorado Springs has free Foreclosure Awareness and Solutions classes the 2nd Tuesday of each month from 6 pm to 8 pm.
Pikes Peak Foreclosure Partnership: 719-444-8833.
for informational purposes only; not intended for or to be taken as legal or financial advice.
Fred, good information in your post. I attended the Arizona Association of Mortgage Brokers' conference yesterday in Phoenix, and listened to a panel talk about lending/real estate fraud. In every case being prosecuted, there was collusion between the local lender and an officer of a local title company. Local connections don't necessarily protect against scams, but it's a good place to start.
I've added you as an associate, and am subscribing to your blog.
Mike in Tucson