If you decide to buy a HUD home, loan fraud is one thing to watch out for when you buy. Here are some steps to prevent you from becoming a victim of loan fraud.
If you want to purchase a home at a low price, either for a residence or an investment, you can buy foreclosed homes from the United States Department of Housing and Urban Development (HUD). If you decide to buy a HUD home, loan fraud is one thing to watch out for when you buy. Here are some steps to prevent you from becoming a victim of loan fraud.
Loan Fraud Prevention Tips from HUD
If you are not careful when you buy a HUD home, loan fraud can cause you to lose your property or a substantial amount of money. Loan fraud can be committed in many different ways, ranging from charging unusually high interest rates to reducing equity in a home by encouraging repeated refinancing. Follow these tips to avoid home loan fraud:
- Before you purchase a HUD home, it is a good idea to enroll in a homeownership education class that is conducted by a HUD-approved non-profit counseling agency.
- Check the references of a few reputable real estate agents and choose one to assist you in purchasing a HUD home.
- Research the prices of homes in the area where you want to buy a home. Get free home listings from RealtyNow here.
- Get a licensed inspector to inspect the HUD home you want to buy. Find out what repairs need to be done and an estimated cost of those repairs.
- Look for a reputable lender for a home loan on the HUD home. Loan fraud can be avoided by being wary of lenders who behave in a suspicious way, such as steering you to a particular loan provider.
- Make sure that all the information you provide in your loan application is true and complete.
- Avoid borrowing an amount that you will have trouble repaying. Failure to make loan payments on time can result in the loss of your property and investment.
- If a document is blank or contains blanks, do not sign it.
- Read all the documents carefully and make sure you understand every detail. Get a reputable real estate lawyer or a HUD-approved housing counselor to review the loan agreement before you sign it.
- If you need to do home improvements, get quotes from a couple of contractors to ensure fair pricing.
- Do not lie about your intention to live in the home.
If you follow these tips when you buy a HUD home, loan fraud is less likely to happen to you. You can also connect with reputable real estate agents that sell HUD homes on RealtyNow You can also see other foreclosed properties through this site.