Home > Blogs > Brian Brady > CRE Lending

There is no such thing as the "best" or "lowest" rate

By Brian Brady

Commercial Real Estate Agent with Matthews Capital Markets NMLS 2415712

October 09, 2006 06:18 PM

I am continually amazed at the misrepresentations mortgage brokers use on their advertising:

Lender411.com uses terms like "best" and "lowest" rates for their mortgage shopping portal.

AAXA Discount Mortgage offers the "best rates possible" and tells us that if we're "searching for the best possible rate, our search ends right there"

LoanSnap is my personal favorite. It tells me that the dispayed rates are "today's best mortgage rates"

Finally, in my home state. e-mortgages tells me that they have the "lowest rates in California"

So why am I so worked up about this ??? Here's the answer: It is absolutely impossible to advertise that you have the best rates or lowest rates, truthfully.

Let me give you an example:

Comments(25)

Comment

Show All Comments

Sort:

K C

Independent Leadership & Financial Fitness Consultant - Pleasant Grove, UT

I love the radio and spot ad's you hear that offer rates that don't exist, or the ever present, "We have the lowest cost's in the industry"... You need to write an article about all those companies claiming their fee's are the lowest. Question, how can anything be lower then "No Cost", but there always is a catch. That's why I focus on giving my clients mortgage ADVICE. The rate war game is a losing battle for everyone but the bait and switch crowd, and I won't play that game.

Oct 10, 2006 06:02 AM

Brian Brady

Matthews Capital Markets - Tampa, FL

858-699-4590

This is role reversal. Brian angry; Jeff the calming influenece.

Oct 10, 2006 06:15 AM

Eddy Martinez

Nationwide Funding Group - Highland Park, CA

I especially like the ads that state that rates are at 8 year lows when they actually arent.

Oct 10, 2006 07:05 AM

Mark Wojewnik

Equity Source Home Loans, LLC - New Port Richey, FL

This is so true Brian. It would appear there is absolutely no regulation on the content of mortgage advertisements. Time and time again I get a call, mail, watch on TV a company offering the lowest/best rate available that "nobody" else can offer. It gives the rest of us a bad name after the customer is disappointed by the ole "Bait & Switch" scheme.

Oct 10, 2006 07:48 AM

Jeff Belonger

Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ

The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Brian...yes, funny twist...

Eddy..... 8 year low? Try the lowest ever.... I hear this sometimes. Or, the lowest in 20 years.... lol Just because you can get a rate in the 5's... hell, I was talking to my dad a month ago and I got him a 30 yr fixed rate at 4.875%.... I think that was 4 years ago? But I was like, gee Dad, I guess I really took care of you there.....

And super HAPPY Jeff signing off.... lol

Oct 10, 2006 09:57 AM

Frances Ann Ade

Cleveland Street Mortgage Inc. - Redmond, WA

Fun topic, Brian! I think my favorite ad is the one that says "If you're paying more than 1.99% on your mortgage, you're paying too much!"

Considering how much regulation and scrutiny mortgage brokers have these days, you wonder just how these advertisers get away with it.

Usually, I just chalk them up to unintential humor.

Oct 10, 2006 11:21 AM

Eddy Martinez

Nationwide Funding Group - Highland Park, CA

Jeff true that man , out here in the metro los angeles area there is so much bogus advertising it makes my stomach sick bro ugh.....

Oct 10, 2006 01:20 PM

Brian Brady

Matthews Capital Markets - Tampa, FL

858-699-4590

Happy Ass Jeff! It's amazing what happens when the right personality gets on the right forum. It's nice to see you shine, Jeff. I'm sure that all of us from the MySpace Mortgage Groups can appreciate this positive environment!

Thanks to all for the comments but especially the MySpace mortgage crew (Eddy, Jeff, Karl, & Nima)

Oct 10, 2006 01:51 PM

Professor X

NONE - Ludington, MI

Did I mention I don't sell rates?

don't even usually talk about them...

did i ever mention that

Oct 10, 2006 02:51 PM

Brian Brady

Matthews Capital Markets - Tampa, FL

858-699-4590

Tommie: I'm Brian, my grandfather was Mr. Brady. I appreciate the term of respect but a loan pro from Texas who sails and likes sports is already my friend. Bidding on ppclk campaigns is one thing (positioning ffor a well-used phrase). I'd bid on "free mortgage " if i thought it would position me properly, HOWEVER. The ads of 'best rate" just ain't true. Thanks for the encoragement.

JP: You never mention rate. Rates don't close loans, people do.

Oct 10, 2006 04:04 PM

Sean Purcell

CQ Financial Group - La Mesa, CA

Great post Brian. As a matter of fact, and with your permission, I will use it the next time a client asks me if I have the lowest rates. I've been giving them Jack Davis' old line: "If you keep shopping your loan, you will be the only person in town with a credit score lower than their interest rate."

The answer to bait and switch, misleading rate ads and outright lies in advertising is simple: read my post tomorrow!

Oct 10, 2006 06:21 PM

Brian Brady

Matthews Capital Markets - Tampa, FL

858-699-4590

Of course, Sean. Use the line. I need to remember to practice what I blog about.

Oct 10, 2006 07:37 PM

Gerhard Ade

eXp Realty - Seattle, WA

What sets me apart, will set you apart.

Brian - I see my better half has already chimed in on this one. How can the public be taking this stuff seriously? But there is a sucker born every minute.

Oct 10, 2006 08:39 PM

Robert D. Ashby

Cruise Planners of South Florida - Plantation, FL

Providing Personalized Travel

Brian - Sorry I am late on this one, but didn't see it until now. You are absolutely correct, but you should go ahead and mention those national advertised guys as well, you know the ones that sound like lie tech and the newer one that manicures its shrubbery.

I always like they way mortgage companies advertise the Pay Option ARM, like it is an actual 1% interest rate. I love the product, but I do not like they it is advertised.

Now, let's go fishing since you have shown how well the bait works. lol.

Oct 11, 2006 04:57 AM

Anonymous

Tara Gurry

Has anyone had a bad experience with AAXA Discount mortgage? www.forthebestrate.com

Dec 23, 2006 11:44 AM

#20

Anonymous

Tara

Can someone tell me what my rights are as a consumer when my intial Good Faith Estimate APR is 5.8 and then the final Good Faith Estimate is 6.3%? This has to be illegal, unethical business practice.

Dec 23, 2006 12:05 PM

#21

Brian Brady

Matthews Capital Markets - Tampa, FL

858-699-4590

Tara:

I have two answers for you:

1- It's the broker/lender's fault. They deceived you, didn't lock the rate, or botched your loan

2- It isn't. The information you told them at application didn't match up to your final verified information.

Let me suggest you contact Jeff Corbett. His form specifically analyzes situations like these and can see if their is a Truth In Lending Act violation . I can tell you that if your initial terms were declined and the lender redisclosed, you most likely have little or no recourse.

The spirit of TILA is for a broker/lender to give you a "ballpark". Then redisclose, approved terms 3 days before your scheduled loan document signing.

Jeff will know this better.

Dec 23, 2006 12:42 PM

Anonymous

jeffX

Tara..plz elaborate with me through my AR contact email when a good time to speak with you would be....

Dec 23, 2006 12:54 PM

#23

Brian Brady

Matthews Capital Markets - Tampa, FL

858-699-4590

Tara,

I didn't properly finish my post...

...however, if the broker deceived you or materially changed the terms on you without redisclosing the new terms, you will nail him to the wall. Jeff Corbett will help you. Contact him.

Dec 23, 2006 05:31 PM

Anonymous

Nat Criss

Hi Brian,

I was looking through my links the other day and noticed a link from this page so I decided to check it out. I am the Marketing Director with AAXA Mortgage and I see that you had commented on our "deceptive advertising". I hope that people reading your blog would take the time to read the verbiage on our homepage before forming a opinion. The first paragraph reads...

"Shop for the lowest mortgage rates with AAXA Discount Mortgage. AAXA Discount Mortgage works with nearly fifty of the Nation's leading mortgage lenders so that we can offer some of the best current mortgage rates and home financing programs in the mortgage industry."

We are a "discount broker" and more often than not, we offer as good of a combination or rates and fees as anyone in the Country. From an advertising perspective, we spend a great deal of effort optimizing our web site for keywords which people search for such as "lowest mortgage rates" and "best mortgage rates". In doing so, you must include those phrases in your copy (as you likely know). I tried to write our copy in such as way to let people know that we offer access to "some of the best mortgage rates". Much the same way you are "America's #1 Mortgage Broker" and that your web site URL implies that you are a lender and not a broker. I am sure that your intention is not to mislead your clients either.

We mean no ill-intentions by what we put out there and I feel confident that we are working in the best interests of the buying public. As a company we take great pride in being up-front with our clients as stated in our vision statement, Our vision for AAXA Discount Mortgage Inc. is: To become the most trusted and the most reputable national mortgage company, to which people and business easily and naturally flow. To provide unparalleled value to all who touch our business and to always be relentless in the pursuit of customer satisfaction. To deliver peace of mind with every interaction, every time.

I am sure that if we ever met in person you would find that we are cut from the same cloth. While I appreciate you calling people out for what you feel as dishonest advertising, I felt it was worth a response from my organization and myself personally. I fight the same battles on a daily basis that you do.

Nat
Please feel free to call me to discuss: 910-796-7122.

Jan 02, 2009 03:09 AM

#25