5 Risky Real Estate Deals

Despite efforts to crack down on risky lending practices, sketchy housing deals are making a comeback.

In the throes of the subprime meltdown, most mortgage lenders tightened lending standards, requiring borrowers to have credit scores of at least 700 and down payments often of 10% or more. But as the credit crunch takes a toll on consumers' credit scores and cash positions, those questionable lending practices are beginning to pop up again.

“[S]ince early this year…a new wave of people are finding ways to scam [home buyers],” says Dani Babb, founder of The Babb Group, which offers real estate consulting to consumers, and dean of business at Andrew Jackson University.

Combine such risky deals as 100% financing and piggyback loans with skyrocketing interest rates and fees and it could spell disaster -- both for borrowers' bottom lines and
the economy, says Chip Cummings, president of Northwind Financial, a Grand Rapids, Mich.-based training and consulting firm for mortgage and realtor firms.

Here are five risky financing offers that prospective home buyers should watch out for: