It would be a dramatic understatement to say that the mortgage industry has changed over the past year. Yet in spite of the changes there are still people out there living in the "glory days" of the refinance boom and have yet to truly learn their lesson. The media has provided their typical spin on what's going on in the real estate market and for once I've found myself siding on the side of near pessimism for the sake of my clients.

So why is it that there are still so many people looking for the easy way out? Why is it that there are seemingly still so many people who just don't KNOW what responsible real estate transactions mean? Think I'm exaggerating a little? Listen to this!

Recently I had one of my top producing real estate agents contact me to ask me for a "personal favor". Her mother needed to lower her payment on her mortgage dramatically and she wanted me to do a "payment choice" loan for her mother. To be honest I was shocked because as I got more information regarding her mother's situation it became very clear to me that this loan would be potentially very detrimental for her mother.

After a lengthy conversation my Realtor became very frustrated with me for not agreeing to proceed with the loan and hung up on me when I suggested a possible reverse mortgage or longer termed ARM. Later that day I received an email from my Realtor explaining that she was very disappointed in me and that she would be going with a local broker who was offering her a 5 year fixed rate that was NOT a neg am or a pay option arm at .5%.

Yes...I said POINT 5 PERCENT.

Not only was it less than 1% but it was also interest only and the best part is that the company emphatically denies that this loan is in any way a neg am note. The following day I heard this company spamming the radio and even television with their new loan that features that low interest only non neg am loan. It was shocking to say the least.

After years of being in this business it never ceases to amaze me how people will allow themselves to be sucked in by any Joe who is willing to lie about their programs and rates. In the end the consumers walks away with a bad loan, extremely high closing costs, and ultimately a bad experience when they should have trusted their responsible lender in the first place.

Just a few days ago I received a purchase contract from this same Realtor as an obvious gesture of fixing the bridge she burned with an email that followed basically apologizing for her mistake. They got to the closing table and found out the truth of what this loan really was and were unpleasantly surprised when they found out that it came with over 4% in fees! Her mother is talking with a reverse mortgage specialist who is going to take care of her. My Realtor is happy and has thanked me for my patience and understanding over and over. In the end I knew she'd need to figure it out on her own to understand what it was I was saying to her. I am just glad she learned because there are still people being taken by these horribly irresponsible loans.

This real estate market will recover in time, but in the mean time don't go chasing after mirages with garbage mortgage promises. If it sounds too good to be true, IT IS! It's sad but what you don't know really can hurt you and those around you.