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Misdleading or false advertising - The reality of the truth

reality

Times are frustrating. We have been in a changing real estate/mortgage market in the last 12 months. As a lender or realtor, you really need to think outside the box at times, but in good consciousness. As a consumer, you don't know who or what to believe or trust at times. Not everything written on the internet or in an advertisement is true or accurate. So then what?

I have been reading a lot of blogs and watching some TV commercials that make me sick to my stomach. Hey, I am not perfect nor do I know everything. But I will shoot straight from the hip. One thing to be careful about our those that tell others that they are very honest and to trust them. Those writing about this in blogs and advertising it, I am not a big fan of. Just think of these words as Red Flags !!!!!

perspective

This is from my own perspective and a lenders perspective of 15 1/2 years in the mortgage industry.

Mortgages cost money, bottom line, end of story. No matter if it's a FHA mortgage, a conventional mortgage, a stated loan, or a no doc loan. Now, that we have gotten that out of the way, let's move on.

People can perceive things differently very easily. Especially when companies or loan officers mislead in their advertisements or give programs fancy names. The end result, we all get our money from the same place. Even many federal credit unions work the same way. Don't let people fool you any differently.

summary Don't fall for the traps. Those traps would be :

-- No closing costs loans (we all have these loans, we just call them higher rates)

-- Lowest rates available

-- 10 day closings

-- A program advertised as a special program to consolidate debt. The normal program is called : Cash-out !!!

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For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 04/03/2008 02:04 PM

Comments (20)

Mortgage Mess in the Mortgage / Finance Channel

fha mortgages, mortgages, red flags, trust, honesty, false advertising

Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: Misdleading or false advertising - The reality of the truth

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20 Comments on Misdleading or false advertising - The reality of the truth

APR

2008

Jeff - Yup, all good points. I don't mind creative ways to garner people's interest but anytime I see fine print that I can't read but covers the bulk of the television screen or any other advertisement, I simply cringe.

Jeff, so true. I saw an ad for a company (name rhymes with lie tech) offering a ridiculously low rate. I guess if you spread thousands of dollars in closing fees out, over 30 years, the low APR would look attractive. Poor consumers that don't talk to professionals and instead take the easy pitch.

Wow Jeff, we actually agree on something! YEAH!!!!! ;-)

These advertisements piss me off too! There was one company here in St. Louis that was running two commercials at once.....One talked about how terrible other lenders were to offer loan programs that mislead consumers into thinking that they were getting a better program than they were. The other commercial, was about refinancing your mortgage at 1.5% FIXED! HMMM?

Great post Jeff!

Bob Mitchell

ValueList Real Estate Services, Inc.

I am glad you wrote about this Jeff! Believe it or not I fell prey to this type of advertising back in 2004. I was supposed to have a fixed loan and the adjustable was buried somewhere in the docs. I refi'd out of that thing by my 5th or 6th payment and I was so lucky we were in our hot market so I could do that easily.

It is best to ask real estate professionals that you TRUST for a referral to another real estate professional! There don't seem to be many around!

If it is too good to be true it probably is. Don't fall for the old bait and switch!

Jeff,

Well said!

Of the several hunderd mortgage sources locally there are several that advertise that they are the only honest source or the lowest price. Oddly, nether is ether!

What bothers me the most is when you can't tell if its a lender, bankruptcy attorney, or politician talking, with out looking for the name on the TV!

But, I'm in the same market as Renee, where "real estate professional" simply means they were once paid. A sad state of affairs.

Bill

Very true, Jeff. It is a shame people fall for it without really knowing the person or program.

JASON S. ..... creative ways, but within reason. But in all honesty, I think the more creative in 'name', the more misleading to the general public. But yes, I cringe, when I can't read the small print. And I usually have a good idea anyhow.

MARK..... they constantly change their adds. They have like 4 different ones for this market right now. If you typically look at the APR, it is much higher than the rate, but with a low rate. As you mentioned, to cover the costs of that rate. But I love their 'flat fee' mortgage. $395, but they don't advertise rate. It's just to get you in the door... and then they have to check your credit... you could have a score of 659 and miss their low fee program by 1 pt... lol I have heard of that before.

BOB..... yes, it is nice when we agree. ;o) But what about FHA mortgages now? Still feel the same as a year ago, that conventional mortgages are the same now?

In regards to your example... wow, a double wammy... lol Imagine that. Again, just double talk, trying to get the consumer comfortable thinking that they are the best and very honest.

RENEE..... you know what's sad... it doesn't come down to education or what you know. We are suppose to trust these individuals. Unless you are in the business, have a trusted family member, or have been taken several times, how does one know? They don't.... you just hope that someone is treating you the way that you should be treated.

NAOMA..... yes, this is usually the case. Not always, but usually.... but as I mentioned to Renee above, how does one know it's a bait and switch, until the end? And when your back is in the corner....

BILL..... thank you Sir... I mean, Bill, my friend. But you have to love that.... that they are the only honest game in town. Imagine that... people have to tell you that they are honest, when they should be. But people fall for it, time again. And yes, a sad state of affairs. thanks

MISSY.... do I know you? Great that you stopped in... ;o) Seriously, it is a shame. And really knowing the person is almost a must now, hence why I love blogging. People are picking me not only for my knowledge, but because they trust me and feel comfortable with me.

On another note, did you get a chance to check out that video?

Jeff, Great post! So many people don't like what we have to say so they keep shopping and maybe even pay an application fee to find out gee we where right to begin with... Nothing my friend in life is free

Jeff, I am still hearing things that just don't sound right....too good to be true. Scams are continuing I guess....I'm glad you warn people to be very careful.

Good stuff dude....the most important thing you said was that bottom line is that mortgages cost money. Too much pretty wrapping paper disgusing this fact.....

Jeff, great post. I do not know how many times it has been said, "there is no such thing as a free loan". If that was the case they would not be advertising that BS non sense.

AWESOME! Between you and Mike Mueller, you've got this topic covered today! I just hope the public reads and BELIEVES that you guys are telling them the truth!

APR

2008

Jeff, wait! You mean you won't be able to match that 1.5% fixed rate out in St. Louis? So I'm wondering, fixed for how long? The terms of any mortgage are pretty complicated, and it's so important for people to understand the basics so they'll know how to compare the various offerings. Of course, a trustworthy loan officer helps. Get licensed in DC already! I even have a spare cell phone number with a 202 area code that is up for grabs!

Hi Jeff - Needless to say, I agree with you about being honest and conscientious in our advertising. There is no place for lying or intentionally misleading consumers. However, to me, this begs the larger question of where to draw the line in advertising? Turn on the TV, visit the Web, or read a magazine, and we all see advertisements featuring things that we know cannot possibly be true. Does the Mercedes for $399/mo really exist? Am I going to look like the guy in the commercial after using my Bowflex? Will Stetson cologne turn me into Tom Brady? The answer, of course, is no, and we all know this. But it is somehow acceptable.

Advertising is meant to make something that is either relatively droll or a luxury item seem like a must-have by painting the item, service or company in the best possible light. Again, I agree that there is no place for patently false advertising. But does that then mean that there is no place for the concept of buyer-beware in the mortgage industry? Should we be held to a higher standard because of the product that we are advertising? I go back and forth on this one myself.

Thanks for the provocative post.

I don't know what it is Jeff, but people innately want to believe that there is a miracle deal out there, Barnum said a "sucker is born every minute," and I wouldn't disagree with that. I don't listen to the radio anymore because I can't stand the mortgage ads.

Great post Jeff! I am working with a client right now that went with Ameriquest and he even asked "Is this a fixed rate loan" and they said yes, sir. Well needless to say he is in a 2/28. When he called to complain, he was told that no one lied to him, he just didnt ask correctly. It was in fact a fixed loan for the first 2 years! Amazing some of the bottom feeders out there.

Jeff - but they say on tv....... it is so frustrating when people fall into these traps - thanks for continuing to educate the public

APR

2008

Jeff, what if I coulf offer you a No Doc loan with a 1.5% total fixed rate with no points and no closing costs... come on man, tell me you wouldn't want it!!! LOL

The old saying is ""When the student is ready the teacher will come" but I think it should be "When the sucker is ready the scam artist will come!"

I especially love the vanilla everyday programs that they give these colorful names... The Dreammaker, Debt Eliminator, the interest Terminator... ROFL it is really hilarious!!

APR

2008

I wonder how some of these people get along out in the real world....

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