Even though our housing market is still not fully recovered from the bubble burst of 2007, half of our older working Americans are still expecting to use the equity in their homes to help finance their retirement. This is surprising because housing values in many parts of the country remain below the level they were at before the recession. A third of our aging Americans claim they will not have their home paid off by the time they retire. Why this is isn't fully clear. It could be that retiree's other investments may have taken such a steep hit that their home is the next best plan, even if their homes are valued less than they were a few years ago. Nearly half of these Americans feel that they will only have enough financial stability to get by on the essentials and not be able to vacation and eat out that often. This is a dire situation. Their home's equity is critical to the plans of many seniors.
Because of this necessity on their homes equity, protection from housing scams is preeminent.
There are professional "equity strippers" who call themselves "Mortgage Refinancers or Re-Conveyers". Some even have the audacity to call themselves "Mortgage Rescuers". These predators are there to steal equity from home owners who are eventually stripped naked both financially and emotionally. These conmen focus in on homeowners with low incomes but who have a good amount of equity. Over time these owners have had a hard time borrowing as legitimate banks won't lend to them. Many of these people are seniors on fixed incomes. These equity strippers will blanket a neighborhood with a direct mail campaign promising fast cash and easy rates. Let's say a desperate home owner falls for the bait, this is what typically happens: Scammers will pose as lenders and offer you more loan than you can afford or encourage you to pad your income on the loan application. By arranging for you to obtain a mortgage with too-high a monthly payment, they're counting on foreclosing on your property when you fall behind. They get your home, which they turn around and sell for a profit and you are HOMELESS! Another trick they use is to encourage you to sign over the deed to "secure better terms" or avoid a feared foreclosure. These nefarious terms are buried inside a mountain of paperwork which is also charging you a ton of transaction and closing fees. Once they have title, they promise to pay off the mortgage and rent back to you a property you no longer own. Often the renter is now paying more in rent than they ever were in mortgage payments. When you fall behind, your evicted.
How to protect yourself from these scammers: 1) Never do business with anyone who calls you, mails or emails you. Do not work with anyone who comes to your door and offers to help you with your mortgage. 2) Never enter any agreement without first consulting your lawyer. Do not agree to speak with a lawyer they recommend. 3) Never turn over your deed to anyone without first consulting a trusted advisor. Finally any agreement you make, use this tip as a rule of thumb: Your potential home loan payment should never be more than 28% of your gross monthly income. Even more so if you are on a fixed monthly payment. Call Realty Executives Dillon, we will provide you with a trusted lender who has your best interests as their goal.