- Have a financial adviser such as an attorney or accountant review all papers before signing anything. Paperwork for a loan contract is often technical and unclear.
- Try first to resolve the matter directly with the original creditors if you need cash to pay off creditors. Most creditors are more interested in negotiating an affordable repayment schedule than in taking expensive legal action.
- Don't assume you will be denied a traditional (non-mortgage) loan. Apply first and find out.
Help for fraud victims
Any attempt to get out of a fraudulent loan contract must be done with an attorney's help. Also because lenders quickly sell these loans to other financial institutions on the secondary market, speed is of the essence to retain your full legal rights.
Under the federal Truth in Lending Act, a home owner is entitled to rescind a mortgage contract for three business days after receiving certain disclosures concerning the loan. If the disclosures are not properly made or if notice of the right to rescind is not given, the borrower can rescind the contract for up to three years.