| US subprime crisis exposes mortgage scams
MIAMI -- Gabriellee Cunningham had fallen behind on the mortgage on her modest suburban Miami home and was mired in debt when she was approached in June by a door-to-door "mortgage lender" who promised to help her. Nine months later, her US$89,000 mortgage has ballooned into a US$234,000 loan, her monthly payments have doubled and she faces foreclosure on a house she no longer owns. Housing officials call Cunningham the victim of one of the worst cases of predatory lending they've ever seen and warn, as the U.S. subprime mortgage crisis grows, of a rising tide of scams in which homeowners are being cheated out of their home equity. .
Shopping for a new home? Avoid these common mortgage mistakes
A home is more than a place to live. It is a financial asset, a place to raise a family and an investment in the community. If you are considering a new home, you aren't alone. According to the National Association of Realtors®, based on current trends and underlying demand, the overall U.S. homeownership rate could exceed 70 percent by 2013. To help you make the most of your investment, the housing counselors at Money Management International encourage you to avoid some common and costly mortgage mistakes. Mistake #1: Confusing the terms "qualify" and "afford." When determining how much home you can afford, remember that your mortgage payment, plus your ongoing debt (credit-card payments, car payments, student loans, child support and so forth) should be no more than 41 percent of your gross income, or you are getting into expensive trouble.
How To Avoid Mortgage Scams
With record numbers of individuals seeking home loans these days, it's no surprise that scam artists have developed new ways to separate borrowers from their money. Mortgage scams are on the rise and typically target people who are overextended, have bad credit, or are in need of financial relief. These scams can cost a lot – in fact, they can result in the loss of your home. Guard yourself against con artists with a little background on common mortgage scams: Slight-of-Hand Signings There are documented cases of homeowners who unwittingly signed away the title to their homes because they were confused by paperwork. With 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.
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