{"id":36339,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/avoiding-home-equity-scams.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"avoiding-home-equity-scams","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/litigation-disputes\/avoiding-home-equity-scams.html","title":{"rendered":"Avoiding Home Equity Scams"},"content":{"rendered":"<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    <p><em>This article was edited and reviewed by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\" rel=\"noopener\">FindLaw Attorney Writers<\/a><\/em><\/p>\n\n                | Last reviewed\n        <time>\n                            May 07, 2026\n                    <\/time>\n    <\/div>\n\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\" rel=\"noopener\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\" rel=\"noopener\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\" rel=\"noopener\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n\n\n\n<div class=\"rxbodyfield\" xmlns:o=\"urn:www.microsoft.com\/office\" xmlns:st1=\"urn:www.microsoft.com\/smarttags\" xmlns:w=\"urn:www.microsoft.com\/word\" xmlns:x=\"urn:www.microsoft.com\/excel\"><font face=\"Times New Roman\"><strong><big><big>Y<\/big><\/big><\/strong>You could lose your home and your money if you borrow from unscrupulous lenders who offer you a high-cost loan based on the equity you have in your home. Certain lenders target homeowners who are elderly or who have low incomes or credit problems&#194;&#8212;and then try to take advantage of them by using deceptive practices. The Federal Trade Commission cautions all homeowners to be on the lookout for:<\/font><br\/><br\/> <ul><li><p align=\"LEFT\"><font face=\"Times New Roman\"><b>Equity Stripping:<\/b> The lender gives you a loan, based on the equity in your home, not on your ability to repay based on your income. If you can&#39;t make the payments, you could end up losing your home.<\/font><\/p><\/li><li><p align=\"LEFT\"><font face=\"Times New Roman\"><b>Loan Flipping:<\/b> The <b\/>lender encourages you to repeatedly refinance the loan and often, to borrow more money. Each time you refinance, you pay additional fees and interest points. That only serves to increase your debt.<\/font><\/p><\/li><li><p align=\"LEFT\"><font face=\"Times New Roman\"><b>Credit Insurance Packing:<\/b> The lender adds credit insurance to your loan, which you may not need.<\/font><\/p><\/li><li><p align=\"LEFT\"><font face=\"Times New Roman\"><b>Bait and Switch:<\/b> The lender offers one set of loan terms when you apply, then pressures you to accept higher charges when you sign to complete the transaction.<\/font><\/p><\/li><li><p align=\"LEFT\"><font face=\"Times New Roman\"><b>Deceptive Loan Servicing:<\/b> The lender doesn&#39;t provide you with accurate or complete account statements and payoff figures. That makes it almost impossible for you to determine how much you have paid or how much you owe. You may pay more than you owe.<\/font><\/p><\/li><\/ul><p align=\"LEFT\"><font face=\"Times New Roman\">Some of these practices violate federal credit laws dealing with disclosures about loan terms, discrimination based on age, gender, marital status, race, or national origin; and debt collection.<\/font><\/p><p align=\"LEFT\"><font face=\"Times New Roman\">You also may have additional rights under state law that would allow you to bring a law suit.<\/font><\/p><p align=\"LEFT\"><font face=\"Times New Roman\">The FTC suggests if you&#39;re thinking about using your home as collateral for a loan, be careful. Unless you can make the loan payments out of current income, you could lose your home as well as the equity you&#39;ve already built up. Some additional tips to remember:<\/font><\/p><ul><li><p align=\"LEFT\"><font face=\"Times New Roman\">The lure of extra money or the chance to reduce monthly credit payments can be very costly in the long run. High interest rates and other credit costs could get you in over your head.<\/font><\/p><\/li><li><p align=\"LEFT\"><font face=\"Times New Roman\">Credit insurance may not be a good deal from a lender. If you want the added security of credit insurance, shop around.<\/font><\/p><\/li><li><p align=\"LEFT\"><font face=\"Times New Roman\">Don&#39;t sign a loan agreement if the terms are not what you were given when you applied.<\/font><\/p><\/li><li><p align=\"LEFT\"><font face=\"Times New Roman\">Ask for an explanation of any dollar amount, term, or condition that you don&#39;t understand. Federal law is very clear about what credit and loan term information <i>must be provided in writing<\/i> when you apply for a loan and before you sign any agreement.<\/font><\/p><\/li><\/ul><p align=\"LEFT\"><font face=\"Times New Roman\">In addition, shop around for the best loan terms and interest rates. Contact lending institutions, such as banks and credit unions, and consult a legal or financial advisor, or someone you can trust before you make any loan decisions. Or contact your local Fair Housing Office, legal aid, or senior services organization for information and help.<\/font><\/p><div align=\"center\"><center><table border=\"0\" cellpadding=\"0\" cellspacing=\"0\" width=\"580\"><tr><td><font face=\"Times New Roman\">You can file a complaint with the FTC by contacting the Consumer Response Center by phone: 202-FTC-HELP (382-4357); TDD: 202-326-2502; by mail: Consumer Response Center, Federal Trade Commission, Washington, DC 20580; or through the Internet, using the <a href=\"http:\/\/www.ftc.gov\/ftc\/complaint.htm\" rel=\"noopener\">online complaint form<\/a>.<\/font> Although the Commission cannot resolve individual problems for consumers, it can act against a company if it sees a pattern of possible law violations. <p>The FTC publishes free brochures on many consumer issues. For a <a href=\"http:\/\/www.ftc.gov\/ftc\/consumer.htm\" rel=\"noopener\">complete list of publications<\/a>, write for <b>Best Sellers<\/b><font size=\"3\">,<\/font> Consumer Response Center, <font size=\"3\"><a href=\"http:\/\/www.ftc.gov\/index.html\" rel=\"noopener\">Federal Trade Commission<\/a>,<\/font> Washington, D.C. 20580; or call (202) FTC-HELP (382-4357), TDD (202) 326-2502.<\/p><\/td><\/tr><\/table><\/center><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>You could lose your home and your money if you borrow from unscrupulous lenders who offer you a high-cost loan based on the equity you have in your home. Certain lenders target homeowners who are elderly or who have low incomes or credit &#8230;<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_categories":[6520,6532],"class_list":["post-36339","corporate","type-corporate","status-publish","hentry","corporate_categories-litigation-disputes","corporate_categories-litigation-disputes__other-litigation-disputes"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate\/36339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=36339"}],"wp:term":[{"taxonomy":"corporate_categories","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_categories?post=36339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}