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.
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.
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...
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For more information on FHA loans, please go to this link. The FHA Expert
For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!
Copyright © 2009 by Jeff Belonger