Question:

Are there mortgage loan scams with home rehab loans?

Answer:

A subcontractor knocking at your door and offering repair services through their company can get you into another category of mortgage loan scams. Usually, if your house needs some repair work and you have been inquiring in your neighborhood, someone may come to your door saying they overheard about your situation and offer you their services.

This mortgage loan scams scheme may include a financial company the contractor works with that are willing to fund a home rehab loan. What happens is that usually the repair work done will be below standard, and the loan will have heavy fees and prepayment penalties.

A home rehab mortgage loan scam can't get you in as much trouble but could be a quite unpleasant experience. So, stick with reputable lending companies and contractors that can provide verifiable records of successful home rehab loans and quality repair work.

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