Another deceptive ploy being used by loan modification scam artists is the Balloon Payment Clause Scam.
If your loan papers include clauses that spell out a short time period after which a large principal payment (or even payment in full) is due, your loan features what is called a "balloon payment."
So, you can see, balloon payments do not get their name because they make you feel lighter than air, but because they are inflated-- that means big, really big. By the way, balloon payments are legal and can be appropriate for some borrowers. Balloon payments are more commonly found in commercial loans, business loans, or loans to wealthy clients. Clients like these routinely borrow large amounts of cash with short term loans. This practice enables them to build solid credit, free up cash flow, and grow the business. You may notice already that these clauses are usually out of place in private residential lending - unless you happen to be wealthy.
However, scammers have been known to place these clauses into private real estate transactions. If the homeowner voices concern, the scammer will say it is a must in order to get a super low rate. Loan modification scam artists have canned answers to calm the borrower's worries. They will suggest that you can simply refinance or sell the home before the balloon payment is due. They make it sound as if it is done all the time and that it is the smart way to go. In this scam, beware of
* Advertisements that use terms like "rescue loan" or "refinance rescue loan."
* Clauses within the loan agreement like "payment in full", "on demand" or "balloon payment."
The loan mod scam described here is just one of many of the dishonest tactics loan modification scam artists use to cheat people out of money they can't even afford to lose . There are many, many more Scams to be aware of. If you are facing foreclosure, Please read or download "The Red Flags of Fraud" a free report created as a public service. You can get this Free Report at http://www.e-home-mortgage-loans.com/foreclosure-rescue-scams.html
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