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Equity Now In The News - 2005

The New York Post
March 12, 2005

Run from rip-offs:
Stop mortgage scams with these five tips
By Juliette Fairley

If you're looking for a mortgage, the good news is that it's pretty easy to get one; the bad news is it's all too easy to fall prey to mortgage scams.

Whether you're buying or refinancing, you should protect yourself. Here are five pointers to help guard against potential fraud:

TIP NO. 1: If a deal sounds too good to be true, it probably is.

Read the fine print if you're offered an unusually low lending rate; sometimes after the application paperwork is signed, the rate goes up.

"If the market rate is 5.875 percent and a mortgage broker quotes you 5 percent, they may just be trying to get you in the door," says Michael L. Moskowitz, president of Equity Now, a mortgage banker and direct lender in Manhattan. "At the last minute, after you signed, they'll find an excuse on your credit report to bring the rate back up, and give you a bogus reason as to why they can't give you the lower rate."

TIP NO. 2: Beware of stalling tactics by mortgage brokers after they secure a "locked-in" rate.

If you've got a low rate that's "locked-in" for 30 days, sometimes mortgage brokers who are scamming will stall the closing on your purchase so that you can't qualify for the rate lock.

"Some of these tactics include telling the potential buyer that the underwriting hasn't come back, the appraiser is not back with the appraisal, the title remains in review or requesting repeat documents that you've already submitted," says Moskowitz. "It shouldn't take more than two weeks to get these documents back."

Another hint: if a mortgage broker promises you a "locked-in" rate, get the offer in writing from the lender, not the mortgage broker.

TIP NO. 3: Know who you are dealing with.

There are mortgage brokers, lenders and mortgage bankers. A broker is a third party that packages loans for approval by a bank - mortgage brokers don't lend their own money. A lender or mortgage bank, by contrast, loans its own money.

TIP NO. 4: Get everything in writing.

That includes closing costs and the mortgage broker's fee. The lender is required to disclose to the broker an estimate of what the closing costs will be within three business days of the application. And the mortgage broker's fees are disclosed on the application. Whatever the fees quoted, get them in writing.

TIP NO. 5: Complain.

If you think you have been the target of a predatory mortgage broker, file a complaint with the N.Y. State Banking Department by calling (212) 709-5540.

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