I was just getting my nightly dose of online news when I saw the following on MSN.com's homepage:
Offer: $425k Loan for $1,417/mo. Refi and lower payments by $400/mo. NO SSN REQUIRED!
Now, what really got me was the claim that you can refi and lower payments without providing your social security number...really? Know what happened when I clicked on the link? You guessed it...LendingTree and their QuickMatch program. They advertise that this quick process will allow you to compare up to 5 loan offers from hundreds of lenders nationwide...without providing your social security number!
Now I guess I know why people keep holding onto the idea that lenders don't need a social in order to quote a rate. It never fails to amaze me when people call and want a rate quote/loan proposal but they don't want to tell you their social, credit score, income, assets, liabilities...nothing. They say "I have good credit and make good money. I pay $1,500 a month for my mortgage now - what rate and payment can you offer me?" I guess since the world at large thinks LendingTree is God's gift to the mortgage borrower they must believe everything they see online (or on TV or hear on the radio or...).
I won't even get started on the percentage of borrowers that would qualify for this loan (um, like, none) or the fact that even at a 5.5% rate (yeah, right!) you would be looking at serious negative amortization with this loan (interest only on that scenario is over $1700, but of course they don't mention that!). I find it appalling that such a "respected" institution as LendingTree is still advertising these high-risk loan programs while appreciation is plummeting and lending guidelines are tightening by the hour. Sure, its great for now but what happens when you need to refinance out of that teaser rate and you realize that not only have rates gone up and your home has barely appreciated, but that you haven't paid a dime to lower your principle...or worse, that you've acutally increased your balance? Consumers are always looking for a way to get more house for less money or a lower payment on their existing mortgage, and ads like these are sooooo misleading and it really gets under my skin!
Sorry...just had to vent a little about the advertising that I think walks the very fine line of false advertising. I suppose with the proper disclosures and fine print, you can say anything you want, huh?
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