Advertisements - Is the grass greener on the other side?

By
Mortgage and Lending with Social Media - Infinity Home Mortgage Company, Inc

 

sales - advertisements How many times do we see advertisements that seem too good to be true. How about the small print that you don't pay attention too. How about the sales person that is more worried about telling you what you want to hear, rather than what they should be telling you. This happens more times than one would think when it comes to mortgages and real estate.

 

Hint : Just because it says sale or one puts an awesome rate and no fees on your good faith estimate, doesn't mean that this is the gospel according to the truth. Or that realtor that promises you a higher price than what the market warrants. Common sense on this one...  if there are comps in the area justifying the price, fine, but ask for these comps and not just the realtors word.

 

 

grass is always greener on the other side

 

Why do I harp on this more than ever?  Because false advertising, false hope, and false promises seem to be taking place more than ever before. We are in an economy of fear, but always hoping for the best. And it's very easy to lose the common sense when you hear someone say...."no problem", "guarantee", "don't worry", "I am the cheapest", "I have the best rates", etc, etc.  Just think about it. Ever hear the saying, "the grass is always greener on the other side?"

What about this one...How about the grass being painted greener for you. A new one that is hitting shelves this month is the word transparency. Wikipedia gives some great definitions and examples of transparency. For more on transparency and what I believe to be an excellent article, Ken Cook wrote : Who invented Transparency.

Overall, those that paint you green grass on the other side of the fence per se are doing you an injustice. In many cases, you have to do more research than ever before, just to make sure a "bait and switch" won't happen to you. Reality, it does happen.

 

 

Here are some current examples in today's market.  Keeping in mind specific words or key phrases that are being used.

 

 

  • DiTech just advertised with the word transparency. (a mortgage company of GMAC Mortgage)

They claim to be upfront, honest, and transparent. It all sounds good. But in my opinion, when someone has to tell you that they are honest & upfront, shouldn't you be cautious about this instead?  Shouldn't the proof be in the pudding, when it comes to communication, educating you as the consumer, and giving you a good deal without saying it???  Just curious...

Example - Small print on their web site :  Minimum credit score of 731 required to be eligible for advertised rate.  Rut row... if you didn't read that, I am sure they don't bring this up. When I called, they didn't, they just wanted my information. 

 

  • I saw a website advertise this when it came to advertising Foreign National loans

If you are a British, Finnish, Russian, Canadian, European, Japanese, or South American citizen or you hold a passport outside of the USA it may be easier for you to qualify for a mortgage than if you were a U.S. citizen.

Key phrase there, it may be easier. One thing that you need is over 25% down for these types of loans. This is a good example of an opening line, to make you think things are easier.

 

  • Here is an advertisement I saw on TV…. They had people telling you that they made $9,000 a month part-time….  $12,000 a month….  $5,000 a month….and the commerical went on to say....

 

Get your risk-free training guide now….    Nothing is free… what’s the catch…  www.80PTBiz.com

This is at the bottom of the commercial, which was in very small print. I had to rewind it several times to read the whole thing.

There are no guarantees of specific income nor are there any representations of actual income. Amounts stated are for illustration purposes only and are not typical. Persons depicted are paid actors.

 

Wow, paid actors. And I thought these people made this kind of money every time, very easily.


  • Bankrate.com was sued for knowingly allow bait & switch advertisers on their site.

 

Making money while turning the other cheek.  And what's sad is that they are still operating, but that had to pay fines. Bankrate.com is basically a lead aggregator and here are a few good articles. And I wanted to thank Drew Sygit for reminding me about bankrate.com's lawsuit.

Bankrate bait-and-switch lawsuit

Popular mortgage web site under scrutiny for lending practices

Bankrate settles lawsuit

 

 

 

 

Summary :  Just because it says so, or someone tells you so, doesn't mean it will always happen that way. I hear this line often.... "If they put it on a good faith estimate, then it must be true." or "they have to honor what's on a "good faith estimate"  That is why many of us in real estate and mortgages preach and practice educating the consumer. Wouldn't you rather hear the true, the reality of it, and not be dragged through the mud...

 

All pictures from istockphoto

 

 

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Copyright © 2009 by Jeff Belonger

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Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Ron Withers ----Retired Mortgage Professional 03/06/2009 11:06 PM
  2. Erica Ramus 03/09/2009 01:07 AM
Topic:
Lending / Financial
Location:
Florida Palm Beach County Palm Beach
Groups:
Realtors®
Mortgages
All About Mortgages/Mortgage Networking
Realtors Needing the services of the Lending Powers
The FHA Mortgage Group
Tags:
advertising
mortgages
false advertising
fha loans
transparency
real estate
misleading advertising
usda loans
transparent mortgages

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Rainmaker
438,071
Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience

The sad thing is that many clients who get woo'd away from you by a lowball/fake offer are too ashamed to come back.

 

Mar 06, 2009 06:07 AM #1
Rainmaker
148,127
Gary Miljour
New Penn Financial, LLC - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ, CA and NC
Jeff, Great Post! We had a Billboard in town that is finally gone, but it always advertised these too good to be true mortgage rates. Clients would call me all the time. The billboards fine print was at least 3 paragraphs long and they were charging lots of points and fees.
Mar 06, 2009 06:13 AM #2
Rainmaker
97,935
Gerry Suarez Jr.
Mortgage Financial Group, Inc. - Mount Dora, FL
Expert Home Loan Advisor

Touche dude, and as Tom said unfortunately most customers are too ashamed to come back to you once they realize they've been duped. Being honest lenders leaves too much room for others to outsell us, but it sure helps us sleep well at night!

Gerry Suarez, Jr.

Your FHA Loan Pro!

Mar 06, 2009 06:56 AM #3
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

 

TOM.... .  hey, Tom & Jerry... loved that cartoon. Seriously though, I would agree with your statement. And it is a shame, because they might get someone next that is good, but maybe not as good as the one that they should have trusted.

GARY.... . the small print always cracks me up and you wonder how many people actually read the fine print. 3 paragraphs long should tell you something right there. Sad & scary...  thanks for sharing this.

JERRY..... .  I will agree, being honest lenders does leave to much room for others to sneak in the middle and dupe the borrower. Not saying that this happens a lot, but it does happen more than one would expect, and that alone is sad & scary. And yes, I can sleep well at night also... thanks

 

Mar 06, 2009 07:13 AM #4
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Jeff, I remember the first time I watched one of those "Flip This House" shows.  They really did paint the front yard green before the Open House!

Mar 06, 2009 08:14 AM #5
Rainmaker
212,573
Jennifer Monroe
Savvy + Company Real Estate - Charlotte, NC
Real Estate REALTOR®/Broker in Beautiful Charlotte

Hi Dude!

If they have to tell me how great they are, I know straight away they aren't. That's true for everything.

Mar 06, 2009 11:54 AM #6
Rainer
85,844
_ _

Jeff,

Great post.  What does this say about clients thought, that they're always willing to believe something that doesn't make since, like a 30 year fixed 4.25% rate with no points or fees, or a listing price 10%-15% above the market, or a 12% yield from Bernie Madoff?

Mar 06, 2009 01:50 PM #7
Rainer
53,146
Ron Withers ----Retired Mortgage Professional
Kissimmee, FL

Jeff:

Bottom line is that our country is in bad need of advertising reform/truth in advertising!  I would like to suggest that every small print disclaimer contain in bold capitalized print a quote by P.T. Barnum.." There's A Sucker Born Every Minute!"

Very sadly this is a truth!  So much of the advertising we see could be characterized as "superfluous B.S.".

Mar 06, 2009 10:48 PM #8
Rainmaker
168,698
Naoma Doriguzzi
Virginia Beach - Virginia Beach, VA
New Media Director

Jeff - This is so great and thanks for calling these advertisements out!  It must be working though... so sad.  All the more that we need to educate our customers

Mar 07, 2009 12:03 AM #9
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917,448
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Jeff, two could points:

Read the fine print

People that have to tell you to Trust them, Don't.

Mar 07, 2009 12:51 AM #10
Rainmaker
275,259
Ken Cook
Content, coding, marketing, host. - Marietta, GA
Content Marketer/Creator

I'm much more suspicious when I can't find the small print.

Mar 07, 2009 08:08 AM #11
Rainmaker
70,532
Loan Survivor Real Estate Financing Expert
Purchases, First Time Buyers, Pre-Approvals, Refinance - Birmingham, MI

You could have also mentioned that Bankrate.com was sued for knowingly allowing bait & switch advertisers on their website.

Mar 07, 2009 01:03 PM #12
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

 

PAT.... .  lol  It's amazing how easy they make that and how to stage your home so easier and affordable.

JENNIFER..... .  it's very true and once in a blue moon, I catch myself saying this to consumers. I guess it's a way to drill it into someones head, because many people will believe most anything that you tell them.

JASON...... . many people believe what is written to be true. I wonder what the percentage of things written in blogs and or advertisement aren't true. I know of some clients that got promised 4.5% rates with little to no points and or fees, because those same loan officers were hoping that rates would drop. How does a borrower truly know this until they go through it. And thanks for the compliment.

RON..... .  well said.... I remember when I first got into the mortgage business, that there was a mortgage section in the Philadelphia Inquirer.  There would be like 50 lenders advertising in this, 90% of the companies would lie.... offering rates with little to no points. But the honest companies advertising would be your well known banks and or lenders. This went on for about 12 years....  now?  You see maybe 8 companies advertise there.  Yes, very sad..  and you can't tell me that regulators missed that section back then. Talk about greed and not protecting the consumer.

NAOMA.... . I firmly believe that we need to educate the consumer more than ever. And I hate to sound negative, but it seems to be getting worse out there with more liars. I will be writing a post about that tonight and will be mentioning this on my radio show this week.

MISSY.... . people should read the fine print. As much as I think I am a trusting person and people should believe that, I have only had one person in front of me read the whole mortgage application.  No wonder so many people got taken on their mortgages from other loan officers. Yes, in some cases, I bet some borrowers actually knew, but used this as an excuse later on, when things got bad.

KEN.... .  that is a very good point. I didn't think about that one, thanks.

DREW.... .  I am going back to add that one.  I forgot about that one and that is a biggie. You have to love when people say that they follow posted rates.  Yea, posted where... lol

 

Mar 08, 2009 10:38 AM #13
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Jeff: Thank you. I appreciate your candor. Although we'd like to think the public doesn't succumb to these offers, they do. And I feel genuinely sorry that they do. It's a funny world we live in; most people know that these offers are too good to be true. And most don't buy into them. the few that do probably get what they deserve1 Thanks again for the post!

Mar 10, 2009 07:43 AM #14
Rainer
83,856
Andrew Haslett
Van Warren Home Inspections, NAHI CRI - Fort Knox, KY
Heartland of Kentuckynulls, Best Home Inspector

Jeff,

Thank you for making these points.

I've managed to avoid being drawn in on the stuff advertised on tv and radio.

But, I wonder about the Good Faith Estimates -- for me, they've never been anywhere close to what's on the line at close of escrow. It's impossible to realistically compare two lenders -- rates and fees change hourly.

I can sleep easier tonight, knowing that I wasn't drawn into the DiTech ads.

Mar 17, 2009 05:07 AM #15
Rainmaker
2,404,195
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

This is a hot topic for me right now.  It's incredible and appalling how some agents that are clueless when it comes to Short Sales boast of hundreds of transactions and high closing ratios - neither metric being supported by the MLS.

Aug 22, 2010 12:35 PM #16
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