Entries from Searchlight Crusade tagged with 'lender games'
Mortgage Accelerators, Money Merge, and Paying Your Mortgage Down
My article Debunking the Money Merge Account Scam has been getting a lot of attention and a large amount of hate mail lately. The scamsters that sell these things love to send me hate mail for exposing the fact that...
Games Lenders Play, Part VII - Selling Mortgage Accelerator Programs
I thought I'd share this with you as an example of the sort of mind set to beware. This is a real email I received, with identifying information redacted. I found you through the DELETED web site and I thought...
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 a minimum of a week - an average of three weeks - to the time...
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...
Conditions After Loan Closing
I love your site and you are very knowledgeable. I have one quick question for you. I bought a home, I made it through closing, I moved my family into the home. During the process I used some closing...
Yield Spread is a Beneficial Tool That Can Be Misused
If you read the papers and the congressional record on the current 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...
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...
Games Lenders Play (Part IV) - Lying About Loan Type
I was approached by these folks a while ago via email. I attempted to get them to write up the experience themselves but I wanted to write something about this before I completely forgot about it. This whole exchange is...
APR vs APY: What The Difference Between Note Rate and APR Tells You
I have in the past told people to ignore APR. APR should not be used to compare between loans. Not only is it a one dimensional number used to measure what is fundamentally a two-dimensional trade-off between rate and...
Biweekly Mortgage Spam
Sometimes spam makes writing an article all too easy. Here is a piece of spam I got, probably because my email at work contains "realestate.com", with identifying information taken out. This goes to show that the financial ignorance of most...
How To Effectively Shop for A Real Estate Mortgage Loan
This is a little harder than shopping for buyer's agents, so congress critters might not be able to do it. But it's nowhere near as tough as high school algebra, so even if you're a politician you can just get...
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 a minimum of a week - probably two weeks or more - to the time...
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...
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...
There Is No Fairy Godmother for Loans
Really. I know that most people who read this are replying "no kidding" but it's amazing how many of those people do not understand it. I got an email yesterday that said, basically, "Help me! I bought with a prepayment...
Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10)
From an email: Our rate was locked (on our mortgage broker's recommendation) on December 4 at 5.375% for 30 days. On December 18 we finally received the rate lock form, which was dated December 17 (the prevailing rate was...
Dissecting the "Lending Game"
Rates were higher when I originally wrote this, but the principles remain the same Right now X is offering me a loan that looks something like this: 80/20 No down payment On the /80: 6.5% FIXED interest for 30 years,...
Understanding Loans: When There Is A Problem, It's Good If They Tell You Right Away
A while ago now, I quoted a loan to someone, and they chose a 5/1 loan at 6 percent with .05 points of discount, and they told me the closest competition was 6.375 with more discount than that. Then when...
California Mortgage Loan Disclosure Statement
California has replaced the one page federal Good Faith Estimate with a two page Mortgage Loan Disclosure Statement. When I originally wrote this, I haven't seen a lot of abuses of this yet, mostly no doubt because it is so...
APR vs APY: What The Difference Between Note Rate and APR Tells You
I have in the past told people to ignore APR. APR should not be used to compare between loans. Not only is it a one dimensional number used to measure what is fundamentally a two-dimensional trade-off between rate and...
Mortgage Accelerators, Money Merge, and Paying Your Mortgage Down
My article Debunking the Money Merge Account Scam has been getting a lot of attention and a large amount of hate mail lately. The scamsters that sell these things love to send me hate mail for exposing the fact that...
The Moment of Truth, Signing Bad Loan Documents and the Right of Rescission
from an email: I had a mortgage refinance done in 2001. The loan officer did not show up for the closing and I never received a good faith estimate before closing only word of mouth figures. At closing the "fees"...
Why Lenders Don't and Won't Tell Borrowers Their Loan Was Turned Down (Games Lenders Play, Part 9)
The short answer is because they will lose the business. But they still want it. It's not like they're paid by the hour. If they don't take a loan all the way to funding and recording, they don't paid. If...
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
A few days ago I wrote an article 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...
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) in the last...
Yield Spread is a Beneficial Tool That Can Be Misused
If you read the papers and the congressional record on the current 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...
Games Lenders Play, Part VII - Selling Mortgage Accelerator Programs
I thought I'd share this with you as an example of the sort of mind set to beware. This is a real email I received a few days ago, with identifying information redacted I found you through the DELETED web...
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...
What Pre-Approval Should Mean
People are understandably hazy on the difference between pre-qualification and pre-approval. Pre-qualification is a non-rigorous process whereby somebody says that based upon the information as presented to them, it appears you'll qualify for the loan. Pre-approval should be more rigorous....
"We'll Beat Any Quote" in Mortgage Loans
Just like "we'll beat any deal!" in any other competitive sales endeavor, this is a game. Actually, it's even more of a game for loans than it is anywhere else, used cars included. What they are hoping is that...
Dissecting the "Lending Game"
Right now X is offering me a loan that looks something like this: 80/20 No down payment On the /80: 6.5% FIXED interest for 30 years, interest-only payment option for 15 years On the /20: 8.75% FIXED interest for...
Loan Rate Sheets: An example, and the games lenders play
This is something I probably should have covered quite some time ago, as it's 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 a few...
Short Payoffs
A while ago I wrote an article called, "What Happens When You Can't Make Your Real Estate Loan Payment." This is kind of a continuation of that, as I got a search that asked, "What is necessary to persuade a...
Games Lenders Play, Part V
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...
Games Lenders Play (Part IV)
I was approached by these folks a few weeks ago via email. I attempted to get them to write up the experience themselves (and I would still like you to if you're reading this), but I wanted to write something...
Games Lenders Play (Part II)
Here's another advertisement that I've gotten in the mail within the last few days: "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 $1286.56...
Games Lenders Play Part I
I was a little shy of ideas of stuff I wanted to write about, and too lazy to finish my research on some stuff I'm working on. But: I get the same junkmail and spam most of you folks do....
Feed Subscription
If you use an RSS reader, you can subscribe to a feed of all future entries tagged 'lender games'. [What is this?]
