Home > Blogs > Eric Reeber > Eric Reeber's (ericreeber) Blog

MORTGAGE LENDERS AND THE OLD, "BAIT AND SWITCH" ISSUE

By Eric Reeber

Mortgage and Lending with AnnieMac Home Mortgage 815040

January 07, 2007 01:15 PM

With more mortgage companies than ever competing for business, the legal term, "bait and switch" has surfaced an amazing amount of times. I am curious to see how many realtors out there have had a client that was promised "A" in the beginning of a loan process and then given "B" either at the settlement table, or right before.

I have heard an enormous amount of local realtors dealing with either mortgage brokers and even lenders performing this illegal act.

The questions I have for you real estate agents are:

A) Has this happened to a client of yours? If this has happend to any of your clients, is it often?

B) Has the buyer taken legal action for retribution?

I also have questions for the mortgage people reading this:

A) Has a realtor ever asked you to lie, or hold mortgage information, to ensure a buyer doesn't walk?

I expect to hear some good stories on this topic. I have been in the business for over 15 years now, managing loan officers and working with real estate agents to best service thier clients. I have fired LO's for committing this act and I expressedly warn new loan officers when I hire them. I am doing what I can in this business to help eliminate this immoral act. However, I can only control my staff. There are so many other companies out there that actually use the whole "I promise a 4.5%! 30 year fixed rate no doc loan"... Technique... However, the closing package reads 8.50% ARM and they need to fully disclose EVERYTHING. Well, the buyers, sellers, title, etc. are all sitting there (of course the LO doesn't show up) waiting for the buyers to sign. 99% of the time, the buyers sign. It's just wrong.... Lets hear it from you guys and gals...

Comments(3)

Comment

Show All Comments

Sort:

Tom Burris

NMLS# 335055 - Baton Rouge, LA

Texas/Louisiana Mortgage Pro - 13 YRS Experience

man, i hear advertisements EVERYDAY for rates that i couldnt get for myself.... and i have OUTSTANDING credit.

bait & switch is too nice of a term or it

Jan 07, 2007 02:13 PM

Nima Rezvan CT Lender CT Senior Mortgage Broker

Nima Rezvan Prosper First Funding Corporation NMLS#110681 - Fairfield, CT

First Time Home Buyer Expert - CT FHA Loans - FHA

Eric,

Mortgage Banker in Connecticut but I do loans in all 50 states. I personally do not practice this unethical tactic. I remember going to one of my colleagues and saying this:

"If I was a scumbag, I would be filthy rich real fast" but I quickly followed that with: "I rather do good business and have my good business make me sucessful on its own time schedule". I hope you enjoyed my true story that took place in my office. I basically lost a deal that day which I had worked so hard on and spent so much time on and I was upset. I checked other major local banks websites and the rate that I was getting my client which was referred to me by a local realtor was the best. Unfortunately my client went on the internet and found someone out in the West Coast who promised them the world. They went to the closing table and were shocked so they didn't sign. Did I get the client back you say? No, the guy was too embarrassed to admit that I was right and he was wrong so he went elsewhere. Just a quick story that backs up my first half of this comment.

Jan 07, 2007 03:35 PM

Eric Reeber

AnnieMac Home Mortgage - Mount Laurel Township, NJ

Nima

I have heard that story 1000 times. When I used to manage an "inside" sales group where my loan officers mainly attained leads from the internet, that happened more often than not.

I know how frustrated you must have felt for losing a loan because you were HONEST!

Jan 08, 2007 01:20 AM

Comments(3)

Eric Reeber

Recent Posts