When an economic crisis hits – whether personal or national – there is a certain group of people who come out of the woodwork, just like cockroaches, scammers who want to separate you from your money. These days with millions of people struggling to pay their mortgages and millions more finding that their retirement funds have taken a hit, scammers are preying upon vulnerable consumers like never before.

Quite frankly, it takes an extra special amount of alertness on the part of consumers to avoid being scammed.

One area where scam artists are performing their dirty deeds is when it comes to home ownership. Because much of your personal information is publicly available, these crooks will often know that you are having financial problems and are waiting for the opportunity to give you their solution. Unfortunately, their solutions are meant to help themselves at your expense, possibly costing you hundreds of dollars or even the outright loss of your home.

Scam artists operate in a number of different ways, but they always work on your emotions to force you to make decisions that can bring you much harm. Let’s take a look at some of the methods scammers use to convince you that they are looking out for your good when they really aren’t:

Fear – Fear is a big motivator for people – we either fight or take flight. With their backs to the wall, some consumers make snap decisions, choices that they later regret. A scam artist will use the fear of you losing your home to convince you to sign away your home to them in exchange for some money. Each scam operates a bit differently from the other, but most likely you’ll give them the title to your home without receiving just compensation.

Ignorance – Ignorance of the law is no excuse for not knowing the law, but many homeowners simply don’t know their rights when it comes to home ownership and foreclosure. Some scam artists will try to intervene in your foreclosure, by offering a “white knight” solution which they say will solve all of your problems. Oftentimes, this involves extracting a fee from you – let’s say, $500 – which involves making phone calls on your behalf you can make for free. Worse, are those scammers who take your money and run.

Pride – Knowing that people who get scammed are often too prideful to admit that they were taken, scammers know that they can operate without impunity, going from homeowner to homeowner with their plans to extract money from them. Don’t let your pride get in your way – report a con job to the police and be prepared to file a complaint and testify in court if need be.

When con artists come a calling, they’ll offer to you a number of solutions including:

Telling you you’re in foreclosure when you are not. If you are behind on your mortgage payments, that doesn’t mean that you’re being foreclosed…yet. Contact your lender and find out where you stand and let them know you fully intend to meet your obligations. Don’t involve a third party (unless it is an attorney representing you) to tell you otherwise.

Offer to provide counseling. Personal business counseling is fine, but what are you getting for their advice? Moreover, what fees are being charged? Some financial counselors are legitimate while others are offering services you can do yourself, but for a fee.

Sign over the deed to them. Never sign your home’s deed over to another party, especially without having an attorney represent you. In addition, do not make payments to a third party as they may not be representing your lender. Again, contact your lender and remain in communication with them throughout your personal financial crisis.

Ultimately, if you are behind on your payments and have no way out, putting your home on the market could help you avoid foreclosure while also protecting your finances and credit. Never sign or do anything out of duress, recognizing that scammers will take advantage of your fear, ignorance, or pride to steal money from you.

Adv. — If you’re looking for additional consumer advice, please visit our sister site at SayLowerBills.com to find information about managing your income, handling debt, and other money saving tips.

Tags: con artists, consumer information, finance counseling, foreclosure, lenders, mortgage, personal finances, scam artists, scammers

Home prices remain depressed in some areas of the country, but for other areas prices continue to rise. This good news/bad news scenario can be different for buyers or sellers from market to market.

Talk of a $700 billion federal bail out; the collapse of Washington Mutual, Wachovia, and Merrill Lynch; as well as uncertainty about the coming presidential election has cast a gloomy cloud over the housing market. But, for people who are qualified to get a home today, the best deals can be had possibly making the fourth quarter of 2008 to be the best time to buy a home in a long time.

Are You Mortgage Qualified?

The key, of course, is being qualified. Unlike just a few years back when mortgage lending rules were relaxed to let hundreds of thousands of people buy homes who would never had been qualified under today’s rules, the mortgage market is actually quite good for today’s buyers. Consider the following:

Mortgage Rates — Lo and behold, mortgage rates are still quite good. A 30-year fixed rate mortgage can be had for just under 6% while jumbo mortgages are going for around 7.25%. This means that if you’re in the market for a modest home, you’ll find the best rates provided you have a sizable amount of money to put down and your credit is very good.

Weak Housing Market — You’ll want to steer clear of neighborhoods where foreclosed homes are dominant, but don’t be afraid to pluck a distressed sale from a better neighborhood where few homes are being offered for sale. Make your move quickly because savvy investors are smelling an opportunity and although they may be thinking about flipping, they still have to consider whether the market will rebound in the next few months to consider making an investment now.

At Or Near Bottom — Double digit drops in housing values over the summer and additional drops this fall are indicating that the bottom of the market may be near. Unfortunately, no one knows when the bottom has been reached, but if home values are off by 20% or more in your area, do you think that a downward spiral will continue?

If you plan on looking for a home this fall, get your financing lined up in advance. That way, when you find a home, you can show wary sellers that you are mortgage qualified and ready to negotiate seriously and follow through on your offer. Check out some smart money tips before you jump in too.

Tags: fixed rate mortgage, home loan, mortgage

FICO, which stands for Fair Isaac Corporation, is a term which describes your personal credit score. That score is used by lenders who will determine if you qualify for a loan and the interest rate you’ll
charged as well as the length of your loan. The higher your score, the more likely you’ll be approved for a consumer loan and receive favorable terms.

In these pressing economic times, not everyone has a good FICO credit score, which can be especially problematic if you need to apply for a consumer loan. Whether seeking a mortgage, a home equity loan/line of credit, car loan, credit card, or some other type of loan, you need to get the highest score possible.

Raise Your FICO Credit Score Step By Step

Fortunately, you can raise your score and see significant results within 2-3 months time. If you plan on applying for a loan some time over the next few months, the following steps can help you improve your FICO credit score:

Shrink those balances: You don’t have to pay off your credit cards, but running big balances is a red flag to creditors. Work on reducing your debt, a step which will gradually raise your credit score.

Don’t apply for too many loans: You may have unwittingly caused your credit score to drop by applying for too many loans in a short period of time. This can happen if you are planning to shop for a new car and are arranging your own financing. By applying to several different lending institutions for the sake of finding the best deal, you’ll be shooting up another warning flag to creditors. Find out the rate first, then apply.

Remedy credit problems: If you’ve been late making payments in the past, then your score will take a hit. Make payments on time and pay more than the minimum amount due each month. Get free copies of your credit reports and check them for errors; notify the credit reporting agencies if you find mistakes. They are required by law to fix mistakes within thirty days or that information must be automatically removed from your credit report.

Keep consumer accounts open: Odd as it may sound, closing a credit card or other consumer account will negatively impact your credit score. Simply tuck your unused credit cards away in a safe place and don’t use them again. You can gradually close them after you secure new credit, especially if you have no plans to borrow again in the near future.

More accounts means a reduced score: Opening more accounts will work against you. Only open up enough consumer accounts as needed.

Consider NOT moving your money around: Consumers have gotten into the habit of shifting outstanding balances from one account to another, but that move can actually reduce your credit score. Consolidating your balances to one account may cause your credit score to drop.

Building a good credit history is an achievable and laudable goal for any consumer. Take care of your credit score and your credit score will take care of  you in the form of favorable lending terms for your next consumer lending opportunity.

Tags: auto loan, car loan, consumer credit, consumer loan, credit card, credit score, FICO, home equity, line of credit, mortgage