Today I will touch briefly on another type of foreclosure rescue scam. In a Mortgage Broker Scam a broker will agree to refinance a loan presumably lowering the homeowner’s payment. However, the broker fails to tell the homeowner that the mortgage involves an adjustable rate mortgage (ARM) or a balloon payment. Both of these scenarios can catch homeowners off guard when their payment increases or a large lump sum comes due. If the homeowner is unable to make the larger payment or a lump sum they can lose their house in foreclosure.
It is essential for potential homeowners and those refinancing properties to read and understand every piece of paper included in their loan documents and not to sign any documents unless all blanks have been filled.
Juanita Carroll
Staff Attorney
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