Entries from Searchlight Crusade tagged with 'lender games'

Why Is My Rate Higher Than My Lender Promised?

First off, neither the California Mortgage Loan Disclosure Statement nor the Federal Good Faith Estimate are promises, commitments, or anything more than your loan provider wants them to be. Quite often, they're nothing more than a fictional story told...

Prepaid Interest and Why You Never Really Skip a Mortgage Payment

Many people think that mortgage interest works like rent: paid in advance before you live in the property for the month. This is not the case. Mortgage interest is paid in arrears. As you begin the month, interest begins...

Why Cost Is As Important As Rate For Mortgage Loans

When I wrote explaining why borrowers should consider a 5/1 ARM, because the tradeoff between rate and cost is lower for that loan, and most people don't keep their loans 5 years anyway, so having a likely need to...

Mortgage Lenders Don't Want to Compete on Actual Price

Yet that is exactly what you want them to do. To avoid competing on price, they have all kinds of distractions they offer to make life more convenient, but not cheaper. They offer automatic payment options, the convenience of having...

Loan Rate Sheets: The Games Lenders Play With Rate and Cost Adjustments

This is part and parcel of the system that's abused. Here are sample rates from one A paper lender, picked at random, that were in effect when I originally wrote this. Rates are lower now, but it's a good example...

Time in Line of Work for Mortgage Qualification - What Counts?

Question from an e-mail: Hi, I have a question about mortgages. My boyfriend and I are looking to buy a home, and since I have recently quit my job he would be the primary applicant. He makes $44k and we...

Debunking the Money Merge Account Scam (Games Lenders Play, Part 8)

Mortgage Accelerators, or Money Merge Accounts, have become the thing that everyone's pushing of late. I have gotten so much junk mail about this from more originators (who don't know who I am) and wholesalers (who should) that I'm going...

Changes In The Mortgage Market And Transparency Since 2005

The overview is simple: The government has made it take slightly more effort to lie to consumers, while adding layers of delays that add an absolute minimum of a week - an average of three weeks - to the...

Games Lenders Play Part II More Misleading Advertising

(This was originally published September 29,2005) Here's another advertisement that I got in the mail: "Pick a Pay, Any Pay!' The Revolutionary Option ARM!" "Start rates as low as 1%!" Loan amount $100,000 Payment $321.64 $200,000 $643.28 $300,000 $964.92 $400,000...

Can a Lender Legally Stop Loan Funding After Signing?

That question brought someone to the site. The answer is "Yes, they can". As a matter of fact, just because they have you sign those documents does not in any way obligate that lender to actually fund your loan. There...

Games Lenders Play, Part I: Misleading Advertising to Get You to Call

I get the same junkmail and spam most of you folks do. They don't know who I am when they send it out. It's just that I know what's going on behind the scenes with this stuff. So I thought...

Yield Spread is a Beneficial Tool That Can Be Misused

If you read the papers and the congressional record on the housing crisis, you might think yield spread is the central culprit for the entire meltdown. You would be wrong. Yield spread is a beneficial tool, offered voluntarily by lenders,...

Assuming Seller Concessions On Loan Quotes

I recently received an email asking about a Good Faith Estimate on a $200k loan. The person asking my opinion attached the actual "estimate" to the email. In addition to a point of origination and a point of discount...

Games Lenders Play, Part V - Selling a Low Payment

Hello, I've been reading your website for awhile now, and have found it very helpful as I'm learning to navigate this crazy loan process! I had a question I was wondering if you could write about/answer. We currently have...

The Loan Shopping Koan

It's very easy for loan providers to talk about a much better loan when you're shopping than they have any intention of delivering. Then you give them thirty days after you sign up, and you're put into a situation where...

Can You Cancel After You Sign Mortgage Loan or Purchase Documents?

what if i sign all the paper work for a house at a title agency, can i back off the house? Depends upon the laws in your state. The Federal three day right of rescission only applies to refinancing your...

"Fixes" for the Mortgage Meltdown - Seems You Can't Keep A Bad Idea Down

Scapegoating, anyone?Brian Brady notes Barney Frank's misplaced quest for one. 1- Prohibition of "yield spread premium" as compensation to originators. 2- Mandatory licensing of mortgage originators by a Federal registry or state regulator. This Bill does direct the Office...

There Is No Fairy Godmother for Loans

Really. I know that most people who read that title are replying "no kidding" but you would be amazed at how many people act like there is such a fairy godmother. I got an email yesterday that said, basically, "Help...

Lowballing Mortgage Quotes Versus "Junk Fees"

One of the things that most mortgage and real estate consumers get mixed up on is the distinction between low-balling and junk fees. Junk fees are when they add fees that really aren't necessary to what you're paying. Low-balling is...

Loans Not Funded

I got a question about "what does it mean if my loan is not funded after right of rescission?" It likely means your loan provider lied to you, probably from day one. Once you have signed documents, there shouldn't be...