Refinance Scams – A Few Things To Watch Out For When Refinancing Your Mortgage
Refinancing your mortgage is a big decision, and one that shouldn’t be made blindly. Here are a few things to watch out for when refinancing your mortgage.
Beware of a broker that is reluctant or refuses to disclose their YSP, or yield spread premium. That term refers to the amount of money the lender is giving to the broker in exchange for charging you a higher interest rate or enacting a longer or more severe pre-payment penalty. Statistically, unsolicited refinance offers have a much higher likelihood of coming from predatory lenders.
Be careful–all Good Faith Estimates are just that; estimates. They are all subject to change.
RESPA (Real Estate Settlement Procedures Act, a federal consuming protecting statue first enacted in 1974) prohibits any settlement service provider from giving or receiving anything of value for the referral of business in connection with a mortgage or charging fees or markups when no additional services has been provided. Mention RESPA to your lender, ask for a list of fees (they cannot charge you $25 for a credit report that...
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