Note Buyers USA

Beware of Fraud

 The following question and answer were posted on a large mortgage lender’s web site.
Q. “Do I need to know anything about the mortgage loan process before I apply?”
A. “No. Not only is our process very simple, but our web site is full of useful information to help guide you through it. And you can always call our toll-free number to seek further assistance along the way.”

Now, compare that statement with a Wall Street Journal article (September 6, 2002) headlined “Citigroup May Pay $200 Million in Fines for Predatory Mortgage Practices.” The Journal further reported, “Federal Trade Commission (FTC) allegations have been hanging over the company and have provided ammunition for critics of Citigroup’s practices. . . . Indeed it isn’t likely that this record settlement will cool off the consumer advocates who continue to complain that Citigroup’s practices haven’t improved to adequately protect borrowers.” Eventually, Citigroup did pay—but the fine levied was $400 million, not$200million.You might think that fine soft hat size would jolt mortgage lenders into walking the straight and narrow. But it hasn’t happened yet. Since 2002 deceptive loan practices, overcharging, and mortgage fraud have multiplied far beyond my warnings and expectations. Without a doubt—good credit or bad credit—the creditors are stalking you.

As the above cited mortgage web site question and answer shows, some mortgage lenders mistakenly lead borrowers to believe that obtaining a mortgage is like buying a ticket on a Greyhound bus. Remember the ad jingle, “Ride the bus and leave the driving to us.” Well, if you think you can leave the driving to your lender, one thing is true: You may get taken for a ride—but not on a scenic highway. Instead, you may end up in a jungle of predatory loan reps and/or predatory loan products.
In fact, FTC investigations, HUD studies, and congressional hearings throughout 2007 continued to expose the wild side of mortgage lending. The attorneys general of no fewer than 13 states have opened investigations of the anti-consumer practices that run rampant among banks, their mortgage loan subsidiaries, and mortgage brokers.

No, Most Lenders and Loan Reps Aren’t Crooks
Okay, let’s talk context and perspective. I don’t try to imply that all loan reps lie awake nights thinking up ways to cheat their customers. But from Babbitt to Willie Loman, salespeople (like lawyers) have enjoyed far more ethical slack than other occupations. Whether we call it puffing, salesmanship, competitive spirit (or legal argument) salespeople (and lawyers) all too easily slip into partial truths, nondisclosures, and deceptively clever explanations.
Never forget: A loan rep wants you to buy a product that he or she is selling at the highest price he can persuade you to pay. A loan rep earns a commission, salary, or bonus based on his or her ability to sell. Loan reps prosper when they convince you that they offer a better deal than you can obtain elsewhere. Because it’s mathematically impossible for a majority of lenders and loan reps to actually offer the best deal—although most promise to do so—it remains your responsibility to identify and negotiate the deal points that get you the loan you need on the best terms available.
Ask questions, probe for detailed answers, run the numbers, compare alternative lenders, compare alternative loan products, search out nontraditional possibilities, shape up your borrower profile, explore a variety of property types and locations. Your reward could easily total $10,000 (or more, much more).