[877YouKeep]

Equity Stripping
A lender takes a portion of the homeowner’s equity in a manner that provides no or little value to the homeowner.

Asset-Based Lending
A lender provides financing to a homeowner based on the homeowner’s equity and without regard to the borrower’s ability to realistically repay the loan. The lender determines that there is equity enough to cover any loss that might incur in the event of a default.

Mortgage Flipping
Repeatedly refinancing loans with no tangible benefit to the consumer. Equity is stripped from the homeowner with each refinance by charging high closing costs and prepayment penalties.

Packing
The borrower gets a loan that has charges for services the consumer does not request or need. Packing most often involves the forced purchase of insurance, such as credit life insurance or unemployment insurance.

“Foreclosure Rescue”
A home is purchased from a homeowner who is facing foreclosure, usually in exchange for the balance of loan. The home is sold back to the homeowner at market value or higher. The lender uses a lease-purchase arrangement with payment rates the homeowner can’t afford.

Property Flipping
Rapid resale of a property at a higher than market value using a phony appraisal. This may include a second mortgage payable to the seller and forged or false loan documents.

Balloon Mortgage
A balloon mortgage has payments based on a 30-year amortization schedule with the unpaid principle balance due in a lump sum at a specified time, generally five to seven years. Borrowers believe they have applied for a low- rate loan with low monthly payments. They learn at closing that it is a short-term balloon loan that will need to refinanced within a few years.

Home Improvement Scams
Using high pressure tactics, unneeded home improvements are sold to homeowners. The work is usually overpriced and often involves a tie-in to an exclusive lender.