Bait and Switch....

By
Mortgage and Lending with Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 NMLS ID# 158606

I potentially lost a deal tonight because of false terms that were given by a competitor.  I don't mind losing going head to head.  Let's compare apples to apples or oranges to oranges. 

                            

Anyway, the competition gave a rate that I know is impossible to give.  The rate wasn't even within the market for any lender.  but then again there were no rates that the borrower could lock into today since the markets were closed.  The other lender sits in a real estate office that is not well respected and they don't have to "earn" by serving their clients.  Also, the lender isn't charging any closing costs (this in and of itself is not an issue, but the combination of all three are impossible...).  I could go on and on.  The bottome line is that I've seen this all too often.

Promises are made by a realtor or a lender, but when it comes to putting stuff into "honoring" what was represented the game all of a sudden changes.  A rate or scenario is represented when there are no "live" rates and when the market changes tomorrow, good or bad, the scenario represented to the client changes as well. 

I've seen realtors say that they'll sell their a house for $350,000 whe the market only calls for a $310,000 sales price.  I work with a top 16 realtor in the State of Illinois and she will quote $310,000 when the market calls for $310,000.  She'll lose the deal and they'll go down the block to Mr. Switch and Bait realtor to list it for $350,000.  Months later the price is either reduced down to $310,000 or the client pulls the listing....GO FIGURE!!!!!

The lender down the street quotes the rate that can't be given and gets the borrower to commit.  Later when things are "live" all of a sudden the situation "got more difficult" than expected and the rate went up or the closing costs are now up.  Or, even worse, they find out right before closing, "but they lender will make it right" during a refinance....

Why can't there be more honest and integrous people.  There have been a lot of lawsuits for people advertising rates that can't be honored.  I recruited someone many years ago who said that when advertising, he'd ask what the lowest rate that was being published in the advertisement.  But he said that the rates wouldn't be published for 2 or 3 days and by the time the advertisement got published it was a moot point, but IT WAS JUST ENOUGH TO GET THE BORROWER TO CALL HIM....and it was up to him to engage the borrower.  He said that it worked most of the time.

Our business would be so much better just having these people kicked to the creek.

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Rainer
160,526
Dwayne West
Atlanta Real Estate - Canton, GA
Canton Georgia Real Estate
This seems to be the problem on the mortgage side of things. It is really a cut-throat business.
Feb 18, 2008 01:49 PM #1
Rainmaker
566,531
Delaware Junk Removal Residential And Commercial Hauling Clean Outs
Delaware Junk Removal 302-530-9186 - Wilmington, DE
Whole House Clean Outs, Basements, Garages, Attics
I agree I had a house listed for $249,000 for 3 months(it was worth 239,00 at the time) and I told the stupid seller over and over again to lower the price, well she did in month 4 to 239,999 and it still didnt get any showings.  I marketed the heck out of it, still nothing.  She withdrew the home to make repairs and listed it 2 weeks later at the same price.  I blame the seller not the other agent.  The seller used to be a friend $700.00 ago but she no longer is.  Its time to move on to the next seller and I hope this one has a brain.
Feb 18, 2008 01:53 PM #2
Rainmaker
120,917
Richard Sweum
1st Security Bank - Everett, WA
We have a radio scheister in our area still adverstising 30 year fixed rates as low as 5.25% with an APR of 5.3%, they must have pulled a rate sheet from that famous Wednesday morning back in January.  I feel your pain.  Hang tough.
Feb 18, 2008 02:15 PM #3
Rainer
69,776
Jonelle Simons
Windermere Real Estate - Park City, UT
I can't STAND it when loan officers bait and switch their customers - It just is such bad business practice!
Feb 18, 2008 02:15 PM #4
Ambassador
895,735
Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production

Dwayne....I'll go head to head with anyone...but put it in print and mean what you say...you know?

Larry....wow...what a crazy story

Rich....such is life.  I'll go head to head with YOU brother.  I'll win a lot, you'll win a lot, but I look like a schmuck if I say the other guy is a cheat...I just hope that with what happens with a lot of people that they open their eyes and come running back before it's too late...

Jonelle....I agree.

Feb 18, 2008 02:35 PM #5
Rainer
29,675
Steven Odierno
Mahwah, NJ
NJ Mortgage & Marketing Professional

Larry - I know exactly how you feel.  Like you, I can certainly live with losing a loan based upon price or service.  It is incredibly difficult to swallow, however, when one loses a loan based upon lies and fantasy.  The lender to whom you are referring is obviously a "one-and-done" person who will eventually bait-and-switch his way right out of the business. 

What boggles my mind even more is not that mortgage professionals do such things, but that clients are so willing to believe that which they fundamentally know cannot be true.  (Ridiculous rates, no closing costs, etc.)  What's more, if you were so inclined, I would bet dollars to donuts that if you told them about a "better" deal than the fictional one being offered by the other lender, they would not believe you.   

Feb 21, 2008 05:48 AM #6
Ambassador
895,735
Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production
STeven....I'm with you....I guess that's why the government's all over us.  Individuals seem to believe anything.
Feb 23, 2008 01:34 PM #7
Rainmaker
89,375
Rick Kellow
Cherry Creek Mortgage - West Bend, WI
FHA & Reverse Mortgage Expert

Larry

Great blog... attention needs to be brought to this and the companies doing need to be identified... this is happening too often...

Feb 26, 2008 01:15 AM #8
Rainer
8,289
Tom Engelhardt
First Choice Mortgage - Ocala, FL
Great Post--Sorry you were on the bad end this time. There are more than I thought still out there though! I received a good faith from a competitor about two weeks ago that was totally blank with the exception of one figure typed as closing costs $2200 alongside a rate that was par for 90% of all companies. Needless to say he has since received "updated" figures and would like me to take another look!
Feb 26, 2008 01:20 AM #9
Ambassador
895,735
Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production

Rick....good commnets.  It is happening more than ever....I mean, in the sense that companies ARE being identified....however, we need to get those people out.


Tom...do the right thing and it should all come back to you.....you know.

Feb 27, 2008 01:52 PM #10
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