Avoiding foreclosure scams, especially in today's real estate crisis, is getting harder and harder to do. Use your common sense and look for the warning signs and hopefully, you can avoid this tough time in your life from becoming even tougher.

Always research the current market. Know that your credit score is good enough to secure a loan before approaching any lender. Lending institutions can't "fix" you bad credit rating, but can skew figures to make it appear you are qualified.

If your lender does disclose his fees, and they're not in line with other brokers, it's another potential red flag. Mark-ups will vary among brokers and lenders, but they should all be within the same range. Be wary of anyone who offers an unusually high (or low) mark-up.

Remember, predatory lenders are looking for people with an inability, not ability, to pay. Always insure you are not falling into these traps set by predators. Counseling on credit and loans is always available. Seek guidance from friends or neighbors who have had experience with them. In addition, many local housing departments offer assistance and guidance on borrowing.

Loan.com's Advice: Though unethical, these predatory loans are legal. Be absolutely sure you are financially prepared to purchase a home. When you're ready, check with agencies such as the FDIC, the Federal Reserve Board of Governors, and use resources like the ones on this site and BestRate.com to find a verified lender.

The purpose of Truth in Lending Laws is to ensure that consumers make informed decisions regarding extensions of credit. While creditors are required to disclose certain information, it's still the consumer's responsibility to research creditors and credit terms.

They say it to make the loan seem less restrictive and more attractive - especially for those who think they might refinance one day, which requires prepayment of your initial loan. But the only way to know for sure whether there's a prepayment penalty is to check the Truth in Lending disclosure form that you receive as part of the mortgage process.

We also recommend that you check with the Better Business Bureau. Look for the number of complaints lodged against a given lender, as well as how well the company addressed those complaints. Any lender of any size will have some unsatisfied customers, but if hundreds of people report problems with a lender, you may want to look elsewhere.

Think of it this way: if loan officers don't fudge their rate quotes, they know they don't have a shot at your loan because they know that someone else is probably fudging a low rate to you. Plus, they know you can't check anywhere to see if they are telling the truth. You're not likely to immediately fill out an application and lock in a false rate quote; you're going to keep calling around and shopping and maybe tomorrow you'll call back whoever gave you the best quote.

The best way to prevent this from happening to you is to use an Upfront Mortgage Broker (UMB). Upfront Mortgage Brokers disclose their fees up front and in writing. This means that if there are rebates offered on whatever loan you choose the money will go to you, not your broker.