"Oh that is a blank blank fee"

I will not use the name of the company because they are back in the loan business. They were gone for a while but are back and they are a nationwide company; big company.

 

Several years ago I was driving down the freeway near Milpitas, Ca and noticed a large electronic billboard soliciting mortgage loans. The big sign said " Zero Points". The announced rate was 6.0% and the APR was 6.472% - the loan was a 30 year fixed rate loan. The numbers are impossible - the math does not work. For a 6.0% loan and 0 points I could see perhaps 6.050 % or such because of a small fee that would be computed in the APR but no way the APR could go as high as 6.472%.

 

So, I called the company pretending to be a customer. Eventually I asked about the rate and the APR. I told the young lady that I did not know a lot about loans but knew a lot about math and I could not figure the numbers out. She was confused and we continued to talk. After about 15 minutes she said, "I know what it is." I asked "What is it?" And she replied that is the (Name of Company) fee!"
I asked "How much is the (Name of Company) fee" and she replied "$3500"

 

A nationwide company that was owned at the time by one of the largest U.S., Corporations and they were adverting a No Point loan but were charging $3500 and simply calling it a 'fee"

 

And then Congress stacked the cards against me and my industry ?

 

Today a major company continues to market HARP loans. I really doubt if there is a HARP loan that can be found anywhere. HASP loans are for those clients who have a Fannie or Freddie loan that is still underwater. Why does this company still market HARP loans? A friend told me that he was on line and heard the add so he was filling out information regarding the loan while on line. As soon as he hit the 'send' button his phone rang and it was the company wanting to make him a mortgage loan. Of course it would not be a HARP loan but they wanted to be his lender.

 

Is this type of advertising legal? I guess as long as there is someone, somewhere out there who has a Fannie or Freddie loan that is still underwater then the advertising is legal. But, I wonder.