Loans > Home Equity Loans ? Beware of Appraisal Fraud

Home Equity Loans ? Beware of Appraisal Fraud

A new report by the independent Demos group has revealed what may not be a surprise to many people ? corruption is rampant in the home appraisal industry. The bust in the dot-com market of some five years ago has left would-be lenders with a surplus of cash to lend. This has led to a huge boom in both mortgage and home equity loan lending. That's not a bad thing; a record 69% of Americans now own their own homes. Owning a home is easier than ever; in 2004 the average down payment was a record low of only three percent.So if everyone is buying a home, and loans are easier to obtain than ever, what is the problem? The problem is that nearly 55% of the appraisers polled in the survey said that they had been pressured by lenders to deliver appraisals that met a "target" value.

The appraisers said that failure to meet the "target" value resulted in either their not being paid, or not being hired again. Since most appraisers want to keep working, they have had a tendency to meet the target value, even if it means that they have overestimated the value of the property. This drives prices artificially higher and leaves many homeowners with mortgages that may be worth more than the homes they were meant to finance. This problem becomes acute should the owner need to sell the home, only to discover that it isn't worth as much as he or she owes on it. The worst-case scenario to result from this would be a burst in the current real estate "bubble" and a nationwide collapse in home values, leading to massive foreclosures.

This probably will not happen, but there are several things prospective borrowers can do to avoid being caught in the appraisal trap:

*Become educated about the appraisal and lending process. The more informed you are, the less likely you are to be caught in a scam.

*Be aware that refinancing your home isn't a cure to all problems. It may seem appealing to use the equity in your home for such uses as debt consolidation but if the result of that is that you owe more on your home than it is worth, you probably haven't gained anything.

*Be active in the appraisal process. Talk to the appraiser, and ask to see the finished appraisal, along with the data used to create it. Appraisals are based in part on the sales of similar properties in your area.

Check them out yourself and compare the home you saw with the stated appraisal value.

*Be bold. Ask your lender if they pressure their appraisers to provide inflated values. You might not get an honest answer, but pay attention to how they respond. You might be able to determine if they are lying.

Ultimately, if you take out a home equity loan or a mortgage for more than your home is worth, you are the one that suffers. That can be easily avoided if you simply pay more attention to the process and educate yourself about the possible pitfalls.

The last thing you want to lose is your home..

?Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com/ and http://www.HomeEquityHelp.net/

40-Year Mortgages: An Alternative to Interest-only Loans?

Interest-only loans are quickly becoming a mainstream loan product. Borrowers who were initially turned-off by the perceived risk associated with an "interest-only" loan are now starting to see the benefits: Lower payments, less money tied up in equity, more flexibility, etc. For the savvy borrower, an "interest-only" loan can be an important component to an overall financial plan -- allowing them to divert principal payments to other financial goals. "Interest-only" is typically an option only available on adjustable rate mortgages (although some lenders are now offering this option on 30-Year Fixed Loans). Borrowers who plan on keeping the loan for a long period of time and are uncomfortable with a loan product that has an adjustable rate component, may be interested in the 40-Year Fixed Rate Mortgage.

(Note: Some lenders do offer a 40-Year term on their adjustable rate mortgages)The more flexible underwriting guidelines of a 40-Year mortgage may also attract some borrowers...

40-Year Mortgages: An Alternative to Interest-only Loans?

Loans > 40-Year Mortgages: An Alternative to Interest-only Loans?

Harbor Credit Debuts Resource Center – Featuring Consumer Blog, Educational Content and Tools Designed to Seriously Educate Consumers

San Diego, CA (ContentDesk) January 12, 2006 -- Harbor Credit (http://www.harborcredit.com), the premier resource on consumer lending announced the debut of its Resource Center featuring a consumer Blog, finance calculators, content library (http://www.harborcredit.com/resourcecenter/library.asp), and customer service center. The Blog (http://www.harborcredit.com/blog/) allows consumers to voice their opinions about current financing companies within the reviews and recommendations section of the website. Consumers can interact and share their experiences and wisdom, simply by posting their comments.The Resource Section (http://www.harborcredit.com/resourcecenter/) also includes extensive, third-party content....

Harbor Credit Debuts Resource Center – Featuring Consumer Blog, Educational Content and Tools Designed to Seriously Educate Consumers

Loans > Harbor Credit Debuts Resource Center – Featuring Consumer Blog, Educational Content and Tools Designed to Seriously Educate Consumers

Springboard Advises Consumers to Beware Refund Anticipation Loans this Tax Season

It's that time of year for consumers to file their taxes and many may decide to go to a tax preparing company in order to do so.
However, Springboard Non-Profit Consumer Credit Management advises consumers to avoid the hard sell by tax preparing companies that try to persuade you to receive a Refund Anticipation Loan (RAL). RALs may seem like a fast refund ("Fast Cash Refunds" or "Instant Refunds"), but "RALs are similar to payday loans - they are very expensive short term loans with high fees that equate to astronomical interest rates," said Dianne Wilkman, President/CEO of Springboard.
Despite their low "default" rate, RALs are high cost loans that are repaid by your tax refund from the Internal Revenue Service (IRS).
For example, with a refund of $2,000, a RAL consumer might pay a $75 loan fee, a $40 electronic filing fee, a $100 tax preparation fee and possibly even a $42 check cashing fee.

The grand total is $257, which is approximately 13% of...

Springboard Advises Consumers to Beware Refund Anticipation Loans this Tax Season

Loans > Springboard Advises Consumers to Beware Refund Anticipation Loans this Tax Season

What is debt consolidation all about?

Debt consolidation is a very common thing in the western countries. It basically means getting a loan to pay off any other loans or debts. Usually, when people get a debt consolidation loan, they look for the lowest interest rate they can find and for something that can make their financial life easier to handle. This means they are interested in uniting all their loans into one and paying their debts faster and easier.

Well, debt consolidation sounds pretty good until now, but is it perfect?
First let's look at the positive aspects of a debt consolidation loan:
1.

Instead of having to make a lot of payments to a lot of creditors you only have one creditor and one monthly payment. This greatly reduces the stress in your life because you aren't forced to figure out who you should pay, when or what the specific amount is. You just have to remember the company that helps you with debt consolidation.
2. The interest rate for a debt consolidation...

What is debt consolidation all about?

Loans > What is debt consolidation all about?