With a record number of people seeking home loans these days, it is not surprising that scam artists have developed new ways for borrowers to part with their money. Mortgage scams are on the rise and generally targets people who are overworked, have bad credit or need financial assistance. These scams can cost a lot - in fact, they may lead to the loss of your home. Guard yourself against con artists with a little background on common mortgage fraud:

Slight of hand Signings

There are cases of homeowners who unknowingly signed away the title to their houses because they were confused by the paperwork. In any decision involving your finances, get everything in writing and insist on reading the documents carefully before signing. Ask questions and make sure you understand the answers. Be sure you never sign paperwork with blank spaces or allow someone to rush the process.

Price high home-buying seminars

You’ve seen ads in newspapers (and on bus benches) for those who buy a house seminars and programs catering for people with less-than-perfect credit. If you are planning such services, visit their fee structure first, and make sure that if you do not buy into a scam. If you are asked to pay fees in advance important, chances are the service is not legitimate. Consult the Better Business Bureau before taking action.

The handover Racket

Say you’re struggling with mortgage payments or foreclosure. A company or individual offers to buy property and sell it back to you once you get your finances back into shape. The process is called “handover”, and there are legitimate companies that offer these services. If you’re a crook, however, you may find yourself unable to buy your house.

Target: Reverse Mortgages

If a family member is considering a reverse mortgage, they must protect themselves against scams targeting specifically reverse mortgages and speak with a HUD approved counselor first. Make sure they get at least three separate offers in writing, and they understand the terms and conditions before signing. Remember, borrowers generally have up to three days of work in which they can cancel a loan document.

Home Equity Hard Knocks

In this type of analysis, the owner is contacted by a contractor offering home renovation affordable. When a homeowner events they can not afford the work, the contractor suggested that he organize financing through a lender knowledge. The owner agrees, the contractor starts work, and then presented the owner with a lot of paperwork. Some documents may be left blank or incomplete, and the contractor threatens to leave work unless they are signed immediately. Afterwards, the owner discovers that they have applied for a home loan with higher rates and fees accompanying. At this stage, the entrepreneur has all the leverage because the work is ongoing and it has probably got a kick-back from the unscrupulous lender.