Mortgage Refinancing, Debt Consolidation and Home Equity Disasters

American homeowners have refinanced their mortgage, obtained debt consolidation loans and home equity loans to the extent of $330 billion since 2001. The main reasons are the high cost of living and the reliance on credit cards for daily living expenses.

Millions of families have hoped that by refinancing their mortgage or by obtaining a debt consolidation loan they would be debt free for years to come. Unfortunately, this has not always been the case. Many families are once again burdened by high credit card debt and now have no equity to tap into. With no relief in sight, these families now face uncertain times and the possibility of losing their homes. In years past, owning a home meant stability and equity growth. Today, equity is being used as fast as it is accumulated.

Another result from this mortgage refinance, debt consolidation and home equity boom has been appraisal fraud. Appraisal fraud artificially inflates a homes value to justify a loan amount otherwise not achievable. Mortgage lenders have stated that appraisal fraud was the fastest type of mortgage fraud in the past few years. Unfortunately, this practice may also leave many homeowners owing more than what their homes are worth.