Spotting Dubious Online Mortgage Ads

Spotting Dubious Online Mortgage Ads



Spotting Dubious Online Mortgage Ads
Theres no question the​ mortgage industry has changed dramatically since the​ beginning of​ 2018. Subprime mortgages are now as​ rare as​ gold,​ and credit requirements have become much stricter. AltA 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 adjustablerate 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 didnt 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 fineprint at​ the​ bottom of​ the​ promotional message. the​ assumption is​ that if​ theres a​ lot of​ tiny conditional text there are catches,​ whereas no or​ very little fineprint means an honest deal.
But this assumption is​ seriously flawed. the​ nuances of​ advertising regulations allow advertisers to​ sidestep the​ traditional checks and balances many people are used to. Look carefully at​ a​ mortgage advert on​ the​ web and you​ might see minimal fineprint like some restrictions apply. But the​ exact details of​ those restrictions arent given,​ at​ least not on​ the​ same page where the​ ad appears. Instead theyre buried at​ the​ bottom of​ the​ target page the​ page you​ are taken to​ once you​ click on​ the​ advert itself.
Additionally,​ the​ final fineprint 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 dont 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 theyre offering and substitute adjustable for fixed. in​ their eyes the​ mortgage is​ fixed because the​ payments wont change for the​ first year or​ so that the​ teaser rate is​ in​ place. But they deliberately dont 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​ baitandswitch 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 smalltime 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 Americas Lending Partners have tackled the​ problem of​ dubious ads headon 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 Dont 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 smalltime 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 its important you​ approach the​ process methodically. When it​ comes to​ advertising,​ dont jump at​ numbers or​ be sold by a​ flashy message alone. Look at​ the​ fineprint 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.




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