The sad thing is that it's often the people who are already in financial trouble who go for this kind of thing, not realizing that it may make things worse. 

Is this sort of like that sign I saw in Estero, "Sneaky ways to lower your house payment"?  I can't imagine the number of people that fall for it.

Sarah-

Just to build off of your last post - wouldn't it be great to have an 'Honesty Magnet'?

Chris-

All of these stupid tricks do nothing more then make the industry look even worse. 

Mortgages really aren't that complicated - but when you add the tricks, schemes and gimmicks, what a mess.

:o)  Either that, or a "dishonesty repellent". 

Marc, I can't stand those ad's Don't you just want to squeeze their heads till they pop?...lol  They just plant a seed in peoples head's on "FREE" and they think Poof all fee's go away.  Now as you know their are programs that pay and truly are no costs loans but the rates are higher. Gee No secret their where did the fee's go..hhmmm

Sarah-

OR - the government actually cracking down on the BS!

Marc, could they really DO that??

         Then why don't they??

Hi Matt-

...and that would be a sloooow squeeze!

Still, what you're talking about is no charge from the Broker - you still have title, taxes, etc.

I've had people think that these no cost things were totally free!

Cheryl-

It's a pity, it really is - we just have to keep trying to get the real info out.

Sarah-

I assume you're talking about my gov't comment-

It's odd - the government will insist on licencing, but then it virtually ignores enforcing the rules the licenced people are supposed to follow!

Do I want more government control overall? No, I just wish they would spend their time on things that really matter!

No kidding, Marc.  You don't have to be a rocket scientist to know that the lender and mortgage broker gotta get paid.

Hi Fran-

True  - but those damn ads work because they play off the average person acting on an impulse, not thinking.

Marc, I came upon your post late through a link from another blog. But I have to say, I totally disagree with your point here. There are true no-cost loans and I do them on a regular basis, in fact they are pretty much the norm here in Chicago. We pay all the costs including title charges - though not pre-paids - by increasing the rate slightly and using the higher yield spread premium to pay all the costs. You are right in that there is no free lunch, because they are paying a higher rate and a higher payment. But they do see the savings immediately and if the rates drop they can refinance again with out a big initial investment. I think for many consumers it is a great way to go. Here is a link to a post I wrote on it. Thanks.

Mr Thompson-

Disagree all you want -

In your own words:

"by increasing the rate slightly and using the higher yield spread premium to pay all the costs."

So you charge a higher rate - which increases the amount of money the client spends - and use that to pay for the costs on what you just called a NO COST loan.

Next:

"There are true no-cost loans and I do them on a regular basis"  which you quickly contradict with

"You are right in that there is no free lunch, because they are paying a higher rate and a higher payment".

BTW - please remove that link to your post, it's extremely bad form to include something like that.