HELOC Fraud

A HELOC or a Home Equity Line of Credit is a loan in which a home owner may borrow against home equity when needed via a checkbook or a credit card. The borrowing may take place over a long time period and needs collateral for assurance of payment in case of a failure on the Home owner’s part to pay. Every home owner is given a specific credit limit to withdraw from the HELOC loan. Generally, lenders allow a home owner to borrow as much as 85% of the total appraised value that was set by the appraiser at the time before the mortgage is agreed.

Home Equity Line Of Credit:

Home Equity Line Of Credit

Home owners may use HELOC at the time of dire need. While some homeowners completely forget about HELOC others tend not to check HELOC as often and that makes them vulnerable to theft and prone to sham. Fraudulent people and identity stealers make millions of dollars illegally every year. To desist this from happening to oneself one can take steps to avert frauds from ripping them off. As the HELOC account is not regularly checked, ordinary people may find themselves in a world of trouble as they have to repay the money that they never spent in the first place.

HELOC Fraud Explained:

HELOC frauds are categorized as mortgage frauds. There are numerous ways in which thieves are able to earn illegal money but the most common type reported by the Federal Bureau of Investigation (FBI) is identity theft. Criminals carefully attain information about the clients from records in order to pose as them, when taking loans. Criminals over the years have crafted ways of cheating Customer Verification Accounts. This enables them to achieve what they set out to do. They usually do this by transferring the money to another account.

People with good credit history and fully paid mortgages are the HELOC thieves’ most prime target. Most victims find out very late after lenders send letters of late payments.

How To Avert This Disaster:

HELOC fraud can be avoided by regularly checking one’s HELOC statements regularly. By spotting any speculative information in the credit reports one can make deductions about whether he has been victimized by HELOD fraud or not. Credit reports are issued by credit bureaus. HELOC frauds can also obtain valuable and classified information from e-mail and mail of the customer. The customer has to make protect his mail from reaching frauds as it contains information that can make a person a victim of HELOC fraud. On a more serious note, one can ask for a Credit freeze from the Credit Bureaus. This will stop the Bureaus from giving out any credit information to anyone.

How To Avoid Further Trouble After Discovering A HELOC:

HELOC Fraud

Although there is an increasing chance of HELOC fraud these days, the customer has to make sure that other people that share the same account haven’t withdrawn the money, this is the first thing that should be clarified. If a customer finds out that he has been victimized by HELOC frauds the first thing that he can do is notify the Lender. After this is done a police report can be filed to bring the culprit to justice and also to get a fraud alert. While alerting the credit agencies of the theft, the police report will help in putting a fraud alert on the credit reports. Fraud alerts last for seven years and whenever money is withdrawn or lent out to the customer the lenders make sure that credit fraud doesn’t happen. The loan is not issued, unless the lenders aren’t sure of the borrower’s identity. All three credit agencies must then have a copy of the borrower’s theft report.

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