Tuesday, October 10, 2017 / by Scott Shine
ALERT: Mortgage Refinance Scams Target Veterans
WASHINGTON, D.C. (Realtor Mag) – Predatory lending schemes are targeting thousands of veterans with Veterans Administration (VA) mortgages.
According to VA loan giant Ginnie Mae, the scams aim to convince borrowers to repeatedly refinance. They often prompt homeowners to switch from a long-term, fixed-rate mortgage to a riskier short-term, adjustable-rate loan.
The borrowers later find that the principal amount owed to the lender has increased by thousands of dollars.
Some lenders also are being accused of using teaser interest rates, “cash out” windfalls, and lower monthly payments. They also use marketing materials that sometimes resemble Department of Defense information.
The VA warned that lenders who make “improper charges or fees” that lead to foreclosure will face stiff penalties. The Consumer Financial Protection Bureau plans to fine and sue offending lenders.
According to VA loan giant Ginnie Mae, the scams aim to convince borrowers to repeatedly refinance. They often prompt homeowners to switch from a long-term, fixed-rate mortgage to a riskier short-term, adjustable-rate loan.
The borrowers later find that the principal amount owed to the lender has increased by thousands of dollars.
Some lenders also are being accused of using teaser interest rates, “cash out” windfalls, and lower monthly payments. They also use marketing materials that sometimes resemble Department of Defense information.
The VA warned that lenders who make “improper charges or fees” that lead to foreclosure will face stiff penalties. The Consumer Financial Protection Bureau plans to fine and sue offending lenders.
