Mortgage & Real Estate RED FLAGS that consumers need to be aware of !!!

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

 

mortgage red flagsPurchasing a home can sometimes be confusing and stressful, and some people in the mortgage/real estate industry will take advantage of consumers. Yes, sometimes there are problems and or issues that come up. But sometimes these problems were known ahead of time, yet never brought to anyones attention. Better yet, some of these problems should have been talked about prior to the mortgage application when the loan officer did their pre-screening of that borrower.  Overall,  it comes down to honesty, integrity, knowledge,  very good service, and just being upfront when problems arise.

First time homebuyers that have never experienced buying a home can sometimes be taken advantage of. In my opinion, there are some key phrases that can sometimes be cause for concern. I call these Red Flags. And for those that have done this before, it doesn’t mean that it won’t happen to you. Anything that I mention below, if you hear it more than once, especially in a short time period, this could be your warning, aka Red Flag.

 

 

mortgage red flags

The General / Basic Red Flags from both the loan officer or the realtor :

  • You finally found that loan officer and or realtor that you want to deal with. This person was always getting back to you when you were first shopping for around. Now you have signed with the realtor or the loan application with the loan officer. A few days later, you try getting a hold of them and they don’t get back to you right away.  If you are leaving a few messages per day, both e-mail or by cell, and this continues for close to 48 hours, there is no excuse. This is a huge Red Flag if this takes place a few days prior to settlement/closing, especially the day of closing.
  • There are Key words or phrases used often that one should be aware of. “I promise”, “I guarantee”, “no problem”, “I’ll fix it”, “I am the best”, “I am the cheapest”, “I have the lowest fees”, "I am honest", or "10 day guarnteed closings", . (a guarantee filled with many small print) Overall, such words could mean trouble.
  • Delayed phone calls. They say, “I promise to call later or tomorrow”. But you don’t hear back from them and now you have to track them down. Yes, things happen. But if this seems to be a reoccurring issue, then you might have problems.
  • Deadlines – If there are certain dates on the contract or with the lender, get everything in as soon as possible.  If the loan officer calls you up the day before or the day of settlement telling you it has been postponed or that you are denied?  Ninety-Nine percent of the time, they knew previous to this and this is a major Red Flag.

 

mortgage red flags

Red Flags from loan officers or lenders :

  • When you are shopping for a mortgage, the loan officer never offers you an itemized fee sheet. They can’t give you a  Good Faith Estimate until a full application has been taken. These just tell you the total numbers over the phone.
  • They don’t offer you the rate or the payment.  This might sound silly, but I had 3 clients just in one month that this happened to them. Yes,  the consumer should have asked.  But maybe the loan officer talked circles around that client, and then they just forgot. Sometimes just hearing, “you are qualified” or “you are approved”, gets you excited, hence why you might forget to ask these important questions. The loan officer should have offered more than just words.
  • You find a loan officer because their rates were very good. But since you have so much on your mind, they never go over the rate lock-in features of that program. If they don’t cover this prior to application or when you were shopping for a mortgage, and especially during application, this could be trouble. Or they get you to sign a rate lock form, but they convince you to float. Question, did that rate even ever exist then?
  • You might qualify for a FHA or VA loan, but tell you that you don’t want those kinds of loans, because conventional is better for you.  This has happened to at least 5 people that I know of. The main reason was because the lender wasn’t FHA or VA approved.
  • If your lender/loan officer changes rates or fees during the process or at settlement, don’t just give in. Avoid excuses such as; “your credit score dropped”, “you have less income”, “your credit isn’t as good”, etc, etc.  There are new laws to where such changes have to be told to you in writing 3 days prior to settlement.
  • When comparing the Itemized Fee Worksheet, aka the good faith estimate, don’t just compare the bottom line, “total costs to borrower”. Some loan officers low ball certain 3rd party fees to make their good faith look cheaper. Or they escrow less taxes on paper that is mandatory in each state.
  • You are at closing and the loan officer says, “don’t worry about those docs, we can correct that later”. NO !!! Once you sign, it’s over.
  • Scenario : Credit score less than 680 and less than 20% down. You know you should have a FHA loan, but the lender says going the conventional way is better…. major red flag. In my opinion, going FHA in this scenario is cheaper monthly.

 

mortgage red flags

Red Flags from realtors or real estate offices :

  • When the realtor only shows their listings. If you want to see homes and they keep showing those only listed by their company or that they are selling themselves.
  • One complaint – When a realtor has a full time job that is not real estate related. I heard a story that the buyers had to wait until their realtor got up to show them the house. This was at 1 pm.

 

mortgage red flags

Red Flags from consumers :

  • Consumers, never hesitate to tell your loan officer or realtor everything. Even if they don’t ask you and you think it’s pertinent to the transaction. Don’t take that chance in not telling them. We are all here to help you and not pass judgment.
  • Be loyal and just don’t hop to every realtor showing houses. Build a rapport  with that person. That’s if  you feel comfortable with that person.

 

 

 

Conclusion :  My biggest problem is when the person that you are working with keeps giving you excuses to when things are delayed and or dates missed.  Yes, things happen, but 9 out of 10 times, it shouldn’t happen often. These types of excuses are usually to delay you in finding out the truth, until it’s too late. If anything above happens for 2 or more days in a row, don’t wait, contact their manager or boss. If you don’t feel like you are getting anywhere at anytime, seek a professional in the particular field or possibly seek legal advice. It’s one thing to give someone the benefit of the doubt, it’s another to be lied to or misled intentionally. Never hesitate to ask questions.

 

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

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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Brenda Busch 12/06/2010 02:49 AM
  2. Brenda Busch 12/06/2010 02:49 AM
  3. Bob & Leilani Souza 12/06/2010 03:44 PM
  4. Gabe Sanders 12/07/2010 12:14 AM
  5. Barbara Altieri 12/07/2010 09:21 AM
  6. Erica Ramus 12/08/2010 08:55 AM
Topic:
Lending / Financial
Location:
New Jersey Camden County Cherry Hill
Groups:
Realtors®
Mortgages
All About Mortgages/Mortgage Networking
1st Time Buyers
"Whacked"!!!
Tags:
fha loans
good faith estimates
best interest rates
mortgage red flags
real estate red flags
fha home loans new jersey

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Ambassador
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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

 

JOE.... . chance and luck is good at times. The biggest beef I have are those loan officers that don't explain the locking-in process.  And thanks, please pass this along.

CHRIS... . they should, but some don't.  And it's usually because such loan officers are good at giving good stories, dragging things out, until it's way to late.  thanks

BOB.... . I keep hearing so many of these, that it made me write about it... and thanks for the polite compliment.

LIZETTE... . that one always get me... they are around in the beginning and then disappear, especially when all hell breaks loose... yet some consumers stay with that person for months. I don't get that one... how far does trust actually go?

 

Dec 06, 2010 10:58 AM #8
Rainmaker
571,868
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Evening Jeff,  Certainly both sides of a transaction can be guilty of the above mistakes but your advice to question or move on is correct !

Dec 06, 2010 11:22 AM #9
Rainer
66,280
Ken Speer
Alpha Global Associates - Phoenix, AZ

Jeff ~ Great points for all parties.  Sometimes things happen that are out of our control, and that's the time we need to be in contact with our clients, and visa versa.  Communication is a two way street, and we all need to be on the same page.  I always encourage my clients, especially first time buyers, to ask everyone questions.  It's a good check in to make certain I'm covering everything I need to.

Dec 06, 2010 12:57 PM #10
Rainmaker
355,153
Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

Jeff, this is a great list of red flags........I would almost add another....." I guarantee you will close on time!"

Dec 06, 2010 02:43 PM #11
Rainer
14,627
Terry Thorpe
Horizon Realty International - Siesta Key, FL

Excellent Post. I have already shared it with a potential buyer/customer who really needs to read it. Thank you.

Dec 06, 2010 03:27 PM #12
Rainmaker
1,070,400
Bob & Leilani Souza
Souza Realty 916.408.5500 - Roseville, CA
Greater Sacramento Area Homes, Land & Investments

Jeff, thanks for writing yet another post that is worthy of not only a feature, but a re-blog as well! :)

Leilani

Dec 06, 2010 03:39 PM #13
Ambassador
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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

 

BILL... . sure, there can be guilty parties on both sides.. the main part should be communication by all parties. thanks

KEN... . so true, about communication. And what kills me more is when the loan officer says, no worries or trust me.. or better yet, they can't be found now... yet, some people still stay with that person for months. thanks for the compliment.


DAMON.... .  added it.. thanks.. I have written about this specifically, yet I forgot to mention it.  And thasnks for the compliment.

TERRY... . thank you and my pleasure.. I hope it helps your borrower... and thanks for the kind words..

LEILANI... .  thank you very much for the kind words and for reblogging this.  thanks

 

Dec 06, 2010 04:05 PM #14
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Very good post and detailed description of red flags for ALL who could be a part of the transaction, Jeff.

Just curious about the red flags for attorney - I happen to be on the wrong side when seller's attorney was not REAL ESTATE attorney!

Dec 06, 2010 04:13 PM #15
Rainmaker
4,798,519
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Jeff, what a great post.  This one needs to be widely distributed.

Dec 07, 2010 12:12 AM #16
Ambassador
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

"Yes,  the consumer should have asked"

My experience is that the consumer does not know what to ask or whom to ask what.  The consumer is very vulnerable. 

Dec 07, 2010 12:22 AM #17
Ambassador
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Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Real estate is a team sport. We are all on the same team. Great post

Dec 07, 2010 01:19 AM #18
Rainmaker
171,688
Greg Miller
Ruoff Home Mortgage - Sarasota, FL
Florida Home Loans - Conventional,FHA,USDA,VA

Very informative Jeff- Love the point on taking or returning phone calls. That's a pet peeve of mine. If it looks like a duck,quacks like a duck?????

Dec 07, 2010 03:17 AM #19
Ambassador
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Celeste "SALLY" Cheeseman
Liberty Homes - Mililani, HI
(RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE

You have all valid points here Jeff. How's about the agent that never returns a call because they want to get 'both sides' on the property. That really disgusts me.

Dec 07, 2010 03:37 AM #20
Ambassador
750,348
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

 

PRAFUL... .   excellent point about attorneys and if one is not a real estate attorney.  This post was already long enough, but I will see where I can add that.  Thanks and thanks for the kind words.

GABE... .  thanks for the compliment and thanks for reblogging this.

LENN.... . I agree 100% that the consumer is very vulnerable. But I do know at times, they would have a question, and didn't ask until later on. This is sometimes out of fear in sounding stupid. And we need to get the point across that they should not feel stupid no matter what the question. thanks

HARRY... . well, I will agree with that. But then again, I just got chewed out by a realtor on trulia.. lol  Sorry, but I had to respond and say that one of the answers was incorrect. I didn't mention her name, but it was obvious who it was. And I can't e-mail the borrower directly in Trulia, so I had to mention this correction. She said.. she checked with her in-house loan officer, and then said, I was rude and that we should be working together. Damn, that is a whole book on itself. thanks.. sorry, but I am just direct and as stated, I couldn't get the right answer to the person asking it, so I had to address it in the forum.

GREG... . returning phone calls is a huge pet peeve of mine. I love when a borrower tells me that their loan officer was responsive when shopping, but once they started the process with that person, it was like pulling teeth. thanks for the compliment...

SALLY... . yes, that would really tick me off... on how one agent will try to control the whole transaction, and sometimes in hopes of getting the other side. thanks

 

Dec 07, 2010 03:53 AM #21
Rainmaker
846,176
Barbara Altieri
Kinard Realty Group Fairfield and New Haven County CT Real Estate - Shelton, CT
REALTOR-Fairfield County CT Homes/Condos For Sale

This is a GREAT well thought out post, Jeff.  Thanks for putting it together. I am going to reblog.  Consumers need to be educated every step of the way.  This will certainly help.  BTW, I am waiting for two calls to be returned after placing them 8 hours ago.  Makes me crazy.

Dec 07, 2010 09:00 AM #22
Rainer
136,524
Deborah Nance
Orange County, Corona, Riverside, Los Angeles - Corona, CA
Southern California , Reverse Mortgage Specialist

Super post!  

Dec 07, 2010 09:39 AM #23
Rainmaker
412,379
Catherine Chaudemanche - Edison & Central NJ
Metuchen Keller Williams Elite Realty / Middlesex County, NJ - Edison, NJ
Full Time, Informed and Involved- Results Driven

"There are Key words or phrases used often that one should be aware of." One of my favorite one is "I'll be honest with you" or "in all honesty" or "Honestly...". Thank you for letting me know that now you are going to be honest with me...:)

Dec 07, 2010 09:42 AM #24
Rainmaker
867,029
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Jeff, great points, all parties should communicate and ask questions, nice AR post.

Dec 09, 2010 05:52 AM #26
Ambassador
750,348
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

 

BARBARA... . my pleasure... and thanks for reblogging this and for the polite compliment. I hope you got those two calls.

DEBORAH.... . thank you very much for the kind words..

CATHERINE... . in all honesty, why would I lie?  ;o)  And I honestly forgot to put this one in here. Now I feel stupid. thanks

ERICA... . ah, to tell you the truth.. yea, 60 days later?  And thanks & for reblogging this..

DAVID... . communication is the key. Thanks for the compliment.

 

Dec 10, 2010 01:53 AM #27
Rainmaker
490,257
Lori Mode
The Mode Real Estate Group - Elk Grove, CA
Real Estate Made Simple

Jeff - another great informative post for the consumer. I love the way you make sense of a complicated process for buyers! 

Dec 10, 2010 02:50 AM #28
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