Your home is most likely your most prized possession. Opting for a home equity loan can mean risking your most prized possession. Its risky, comprises abusive home equity loan lending practices and hiding of terms of the loan. Before going ahead with such a home equity loan its essential to beware of fraud and scams in the market.
Types of scams
There are several prominent kinds of scams doing the rounds, many of which may entrap unsuspecting borrowers. Here we list out some of them:
Equity stripping: This typically involves a practice whereby even if the borrower doesnt have sufficient income to support monthly payments on the home equity loan the borrower is still lured into securing a loan. The reason? The lender is never interested in the ability of the borrower in making monthly payments. The final objective is to secure the home. Therefore once the borrower is unable to pay the monthly payment on the home equity loan the lender will foreclose thus taking possession of the home and the equity.
Hiding terms of the loan/ Balloon payment: This is probably even worse than equity stripping. In such cases, if the borrower is about to face...
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