Mortgage, Loans, Insurance, Real Estate, Investment, Tax and Financial Services

Spotting Dubious Online Mortgage Ads

There's no question the mortgage industry has changed dramatically since the beginning of 2007. Subprime mortgages are now as rare as gold, and credit requirements have become much stricter. Alt-A mortgages too are hard to come by. Many large mortgage providers have seen profits markedly down, and some have even closed their doors. And sadly, a lot of homeowners are now struggling to pay their adjustable-rate mortgages and keep their homes.

But no matter how much an environment changes, some things stay the same. Those outrageous advertisements offering unbelievable home loans are still being used by a minority of mortgages companies to draw in new customers, even as their previous customers are being foreclosed on because they were sold a loan they didn't expect or understand.

The Ad Constant

Such ads are rarer than they were a year ago, because quite a few of the companies which depended on them for bringing in new business have moved on to more profitable industries or simply shut up shop. But they can still be found, lurking on websites big and small, and tempting desperate homeowners into taking the bait.

Fortunately, such ads are usually easy to detect. Many use interest rates or monthly payment amounts to snare and impress readers who might otherwise see little gain from such a product. More importantly, these ads use numbers which are ridiculously agreeable, and at face value seem to include very few requirements.

Warning Signs

But promises of a $500,000 mortgage for a few hundred dollars a month should have you running the other way. Why? Because these kinds of loans are invariably driven by adjustable rates, depend on an astonishingly low teaser rate, and will result in a huge jump in minimum monthly payments once that teaser rate has expired after a year or two.

One way people determine whether an ad is shady or not is to scan for fine-print at the bottom of the promotional message. The assumption is that if there's a lot of tiny conditional text there are catches, whereas no or very little fine-print means an honest deal.

But this assumption is seriously flawed. The nuances of advertising regulations allow advertisers to side-step the traditional checks and balances many people are used to. Look carefully at a mortgage advert on the web and you might see minimal fine-print like "some restrictions apply". But the exact details of those restrictions aren't given, at least not on the same page where the ad appears. Instead they're buried at the bottom of the target page - the page you are taken to once you click on the advert itself.

Additionally, the final fine-print might not deal with the technical details of the loan as you would hope. Some only cover aspects like teaser rates and prepayment penalties in a vague and noncommittal way. Others don't mention them at all.

One other important development in mortgage advertising is the use of the term "fixed rate". Since the subprime shakeout, adjustable rate mortgages have become vilified and viewed as dangerous by many. Sometimes this reputation is unjust. But regardless, it has posed a problem to deceptive advertisers. Their solution has been to bend the truth about the product they're offering and substitute "adjustable" for "fixed". In their eyes the mortgage is fixed because the payments won't change for the first year or so that the teaser rate is in place. But they deliberately don't acknowledge that after the teaser rate has expired the payments will start shifting, often upwards.

New Trends, Same Old Risks

As the mortgage market has stuttered, law makers and industry leaders have stepped in to curb bad business practices. Teaser rates and prepayment penalties, which have been the undoing of many unsuspecting homeowners, are now frowned upon. And reports of dubious mortgage origination practices like exaggerated income statements or bait-and-switch offers are rigorously investigated.

Some argue that given these developments such questionable practices must no longer be possible. But sadly, they are. No matter how the mortgage climate changes there will always be companies who choose to use advertising in questionable ways. Worse still are the unscrupulous small-time opportunists who try to fly below the radar, or who operate to make a quick buck from unsuspecting customers and then slink away into the night.

Companies like America's Lending Partners have tackled the problem of dubious ads head-on by trying to educate consumers that some mortgage ads can be harmful to their financial health. They placed an ad on their home page promising a $490,000 mortgage for only $99 per month. But when someone clicks on that ad they are told "Don't Believe Everything You Read!", and are warned as to the dangerous nature of such promotions. The strategy has yielded some interesting calls into their customer service department from small-time brokers and loan officers who had hoped to ensnare unsuspecting homeowners with an obviously toxic mortgage.

Conclusion

When shopping for something as major as a home loan it's important you approach the process methodically. When it comes to advertising, don't jump at numbers or be sold by a flashy message alone. Look at the fine-print and check the credentials of the company making the offer. Educate yourself and do your research. The time invested will probably save you thousands of dollars down the road.

Andrew Carey works at America's Lending Partners, a leading online mortgage business that has been providing homeowners and home buyers with a variety of resources and mortgage services since 1999. For more information please visit: http://www.LendingPartners.com

Student loan consolidation with federal debt program
If you are a college student (parents please take note), this Federal Government program can help you cut monthly payments on your student loans. You can consolidate now and lock in a low fixed rate. When you consolidate student loans with a Federal Consolidation Loan, you not only can take advantage of these low rates, you can lock in that rate for the life of your loan. One easy process, one low fixed rate, one low monthly payment, one lender. This is a free U.S. Government program (no fees or other charges). Really Great Rate is an authorized agency for this program - you can check your eligibility in a minute or two, with no obligation

Home Equity Loans: Expert Tips and Advice
Get expert advice, tips, and timely information. Manage your own Real Estate and Investment Portfolio to generate an income so you can take control of your financial life and do the things you want to do.

MORE ARTICLES:

Loan Application Mortgage Rate Calculator for your Mortgage Loan
Are you thinking of purchasing land, a piece of property, or your dream house? Then maybe you have considered applying for a mortgage loan. If you have already decided that you are getting a mortgage loan, then let a loan application mortgage rate calculator help you.

Adjustable Rate (ARM) Mortgage Holders Should Refinance to Fixed Rates, Recommends the Katz Mortgage Team
Katz Mortgage Team, www.KatzMortgageTeam.net, of Amtrust Mortgage Corporation, has announced that Fixed Mortgage Rates are now at their lowest point in over a year. They are officially changing their recommendation from "HOLD" to "REFI" for many of their clients who took advantage of the extremely low adjustable rate mortgages of 2002 and 2003.

A secured bad credit home mortgage loan comes with reduced interest rates
A secured bad credit home mortgage loan comes with reduced interest rates

Bad Credit Home Loan Mortgage Services - What To Consider When Applying For A Mortgage
Most new homebuyers are unfamiliar with how mortgage loans work. Because of this, several people accept bad loans. This results in homebuyers paying more than necessary. If you have bad credit, accepting a mortgage with good terms is a must. Many lenders prey on those with bad credit. Their objective is to charge higher fees and boost their profit. Before applying for a mortgage loan, consider the following factors.

Newest Rate and Payment Mortgage Calculators for Home Loans from The Mortgage Store Online
The Mortgage Store Online (TMSO) today released its complete set of free home mortgage loan calculators on their website at themortgagestoreonline.com. These highly accurate mortgage calculators use current and true rate information to give borrowers the most realistic mortgage payment calculations.

Bad Credit Mortgage Company - Recognizing Mortgage Lender Scams
Mortgage lenders recognize the value of owning a home. Because some people will not easily qualify for a home loan, several lenders have begun offering home loans to tailor a variety of needs. For this matter, bad credit mortgage lenders have gained widespread popularity. The majority of bad credit lenders are sincere in their efforts to help you finance a home. However, some lenders are only concerned about their profit, and will not offer the best rate and terms.

Home Loan Mortgage Rate Quote: Online Convenience
You can find ANYTHING on the Internet! Never is this as true as when it comes to finding home loan mortgage rate quotes. In fact, along with pornography, finance and banking has probably been the biggest internet success of all. There is nothing you can do, nothing you can find in a physical bank branch that you can't get from a bank over the Internet. This includes a home loan mortgage rate quote.

Interest Only Home Equity Loans Featuring a Fixed Second Mortgage Rate from BD Nationwide
BD Nationwide Mortgage introduces an affordable only home equity loan that features an interest only payment option with a fixed rate. This second mortgage allows borrowers to get a fixed mortgage rate while also benefitting from a reduced payment and increased cash flow. Homeowners have the luxury of converting their home equity line of credit into a fixed rate second mortgage while keeping the interest only option. BD Nationwide has released several new second mortgage products in 2006 that have offered additional "cash out" opportunities for homeowners without requiring them to refinance their existing first mortgage.

Mortgage Loans, Construction Loans, Refinancing Mortgage Rate
TheLoansStore.com was created with the interests of the consumer in mind. If you have ever wondered if owning your own home or refinancing your current home would be possible, dont wonder anymore. From new Construction Loans to Mortgages Loans, Bad Credit Home Loans and Refinancing Mortgage Rate. Whether you have great credit, marginal or bad credit, theLoansStore.com can help. We know one size never fits all borrowers.

Low Credit Score Mortgage Refinance - Lock In A Low Rate With Bad Credit
Even with a low credit score, you can refinance your mortgage for a locked in low rate. Bad credit doesn't have to prevent you from saving money on your loan costs. The best way to find a cheap rate is to research loan offers online. But you can also improve your loan application with the following tips.

Affordable Bad Credit Mortgage Loans - 3 Tips to Reasonable Bad Credit Mortgage Loans
Finding a mortgage loan with a bad credit rating can be an absolute nightmare: Driving from broker to broker, bank to bank, getting turned down every time, all the while your credit keeps dropping with every credit check. Fortunately, this painful process can be avoided with just a few simple tips.

Refinance Mortgage Rate and Mortgage Rates
Refinance mortgage rate is the best rate available to qualified homeowners for refinancing their current home mortgage. Refinance mortgage rates vary from product to product and customer to customer.

Low Rate Home Equity Loans - Refinancing For A Shorter Term And Better Rate
Looking for a better rate is a common reason people choose to refinance their home equity loan. But did you know that shortening your loan term can save you more money than reducing rates? Combine the two and you will save yourself thousands in interest costs and trim years off your payment schedule.

Refinancing With A Second Mortgage Or Home Equity Loan
If you're looking into refinancing your home and have a second mortgage or a home equity loan or line of credit, in some cases you may be out of luck If you want to refinance your primary loan, you first must convince the lenders holding any second position loans to agree to continue to be in a subordinate position behind the new primary loan

Bad Credit Loan Mortgage Rate And The Good Lender
"Blessed are the young," says Herbert Hoover, "for they shall inherit the national debt." Debt, in whatever language or guise, is bad. But what if you've incurred debts and find it hard to dig yourself out of them? Does this mean you are forever disqualified from owning a home? Some would say yes. Bad credit loan mortgage rates show otherwise.