FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware

This is a good synopsis of many.  There are many more. 

The ones that I believe are the most deceptive are the ones that give the impression that they are the FHA.  The ad sounds like a government office advising folks looking for mortgage modification to call. 

Disgusting. 

Jeff,

Another great,informative blog!

Thanks,

Kathy Opatka

"Buyer beware" and "there's a sucker born every minute".....

Jeff, you are right, of course, on all points. I would hope most people don't fall for this garbage, but obviously many do or these companies wouldn't keep spending money on advertising at the rate way they do.

Good post Jeff. Those of us who are in lending and are the 'good guys' have a lot of work to do to restore public faith in our profession, and to get our profession back to a place where we are really advising our clients on what is best for them, rather than just trying to tap then for the maximum possible commission.

My favourite scam company name so far is F.H.A. (Federal Housing Assistance, nothing to do with FHA). The intention is obviously to imply a connection to the government.

Jeff -- as Harry Houdini did . . . went around to DEBUNK the "spiritualists" ... GREAT BLOG.  Thanks for putting the time into this.  I insiders know the trick, in other words.  Thanks for trying to DEBUNK!!

Hi Jeff. There is an infomercial that makes it seem as though it is legit. I notice one of your next posts will be about Lending Trees of this world. I'm looking forward to reading that one.

Great post Jeff, I do see all the advertising going on. You really pointed out some great ads too. I have had clients try to cancel with their lender because of such advertising, while we are in escrow. It is a good lesson learned. Thank you!   

Jeff,

Another great post buddy- I'm still laughing from how many times a day I have to tell people "annualcreditreport.com not the free one!"

Thanks for all you do Belonger. This is a true public service!

Gerry Suarez, Jr.

Your FHA Loan Pro!

Jeff, none of this is new which is why as a consumer you have to be careful. These companies are deceiving us by using half truths in their ads while barely staying within the law

LENN..... . there are tons more... lol  Seriously though, I have pointed out those FHA ones as you mentioned, but forgot to in this one. I might add one later... but you are 110% correct, those web sites that make you believe that it's from HUD or the gov't, supporting FHA mortgages.  It is disgusting and thanks for the polite compliment.

KATHY... .  thank you very much for the kind words.

MICHAEL.... . I know many that made tons of money from 1992 to 2005 because of such ads.  Remember the pay option arms?  And how so many would advertise them as a fixed rate... but not explain that it was fixed for a month.. and yes, many do fall for these, hence why we keep seeing the same advertising over and over.  Someone is supporting them.

SIMON.... . yes, we do have some work ahead of us.. but I don't think this will ever change. There will always be a company out there, trying to out think everyone, and make an ad that is very appealing and believable.  In regards to those FHA sites.. do you mean sites such as these?  FHA.com - FHA loans (gee, look at the header...  Opening your door to home ownership.  Sounds like the FHA/HUD site)  And thanks for the compliment.

CARLA.... . debunking sounds like a new widget... lol  thanks for the compliment.

LANA.... . I despise those infomercials and they do make them seem so real... and I will be working on Part 2 in a few days.  thanks

BOBBY... . thanks for the compliments.  But what gets me...  How far into escrow are those clients that you mentioned, trying to get out of the deal?  Those are the stories that we need to write about.  thanks and thanks for the compliment..

Great post Jeff!  Remeber when Carlton Sheets used to run late night informercials on how to buy real estate and get back thousands of dollars at the closing table?  Every time those darned things would run my phone would ring for days with people wanting to buy rental properties with no money.  UGH!

Ditech used to run lots of ads for ridiculous rates with a lot of very fine print that would flash along the bottom of the screen.  No one was ever able to get those rates.  Guess that why we don't see them on tv anymore.

Can't wait to see you post about Lending Tree.

I feel your frustration! I get so sick of seeing ads for ridiculously low interest rates that they fail to inform is for a 3/1 ARM with 3 discount points. I think in the long run people see these places and loan officers for what they really are...frauds!

GERRY.... . funny yet sad. Ads can fool the best of us.  Luckily you and I are in this business, to be able to understand them and to be able to pick out the ones that are so misleading. If we weren't in this business, do you think you could be fooled by some?  lol  Hey, thanks for those kind words and compliment.

MICHELANGELO.... . even though this has been going on for eons, it will continue. And you are correct, half truths that barely keep within the laws of advertising.  thanks

JANE.... . Carlton Sheets and....  what was that other guy. They would have like 3 to 5 people or couples on there with photo albums of properties bought through Sheets program.  The funny/sad thing is, was that even true?  Especially the ones that said you could get cash back at settlement. Yes, this is possible, but not with normal financing... not on a conventional loan, FHA loan, VA loan, or even a USDA loan.

In regards to Di Tech... funny that you mentioned them, because I originally had them in here, but will be talking about them in Part 2 also. And thanks for the compliment.

JOHN.... . nah, not as frustrated as I use to be, because this will never stop. I feel better that I am able to blog about this and just about mortgages in general. People can either listen or roll the dice. In the long run? I will disagree... not until they give one of these companies a try and get burnt themselves. Then they believe not.  thanks...  ;o)

I find all these sham ads/websites, etc totally disgusting and misleading for the consumer.  In desperation or whatever reason many consumers contact these folks and make it profitable for them or they wouldn't keep paying for all the ads.

So many people start looking for financing on the internet when they are considering relocating when they should be consulting whoever they would be using to sell their existing property or their financial institutes.

Thanks for an informative post.

Sue of Robin and Sue, Hendersonville NC

Jeff: Thanks! Another stellar blog post. When a person bases their business on value-added they get it. It's amazing to me how our customer knows that the advertising is false. Yet they sometimes still succumb to the bait. Keep up the consumer-centric blog posts. They will pay you huge dividends my friend!

Jeff  I really believe TV ads are becoming less and less vital just as political ads are loaded with deception  Art

Another great informative post Jeff ! 

Linda Metallo, Re/max Impact, Lockport, Il.

...now you have me singing that darn "FreeCreditReportDotCom" song !!!!

lol !

Great job Jeff, this is exactly what is needed.  Respected industry professionals pointing their finger and naming names.  I am with you 100% in this expose and look forward kicking lots of sleazy advertising butt.

Best regards, Bill Ladewig

Jeff,
Those ads drive me crazy.   People are being misled and taken advantage of--I don't like that.

Free credit report.com is such a misleading commercial>  but government officials will regulate everything but the obvious 

As long as we have MANY in the general public that subscribes to the Government Bailout mentality.... These hacks will prey on folks.

I enjoy your blogs. I don't trust any of them and we all have the reason not to trust them.

Jeff, I have looked at those ads on Facebook and wondered about them - never clicking on them, but something didn't look quite right. This is a very misleading practice. In fact, I came upon that USDA web site last spring. It was harder to find the real site than that one - frustrating!

Jeff - Advertisers suck! I actually use to purchase the leads from 'lower my bills' and actually closed a lot of deals. The problem was that I had to get past the fact that they were advertising the 'Fed Rate' which has nothing to do with mortgage rates. So, people would call asking for the rate of 2.75%. I explained the differences and apologized as I wasnt responsible for the ad but could still assist. Some understood and moved forward where as others were upset. Can you blame them? I still see and hear many things that are incorrect.

ROBIN & SUE.... .  I agree with your statement, that a lot of this is disgusting.  Especially now, those ads that use Obama's name,in hopes to sucker in those Obama followers that are loyal.

But in regards to the next paragraph... I disagree that this is a bad thing all around. Over 80% of my business comes from those that search online and find me. I am helping one in a state that I am not even licensed in and have helped her with 2 people that were pulling the wool over her eyes. She finally realized the red flags that I pointed out and it now makes sense. Just my opinion.... not all online are bad. gee, even those local can be just as bad or even worse.  Thanks for the kind words at the end.

PAUL... . well, not all customers know that these ads are false, otherwise, they would have been out of business a long time ago. But yes, it is nice when a borrower does realize this. Overall, thank you very much for those kind words and compliment... much appreciative.

ART.... . well, I thought so to, until I started to see more on tv again...  and people still fall for these.  Especially when those advertising are getting more creative. I swear, the last series that I saw on ESPN, you would think it came directly from the gov't, that they are endorsing the commercial. Yet it was so deceptive and misleading... this should be criminal.

LINDA.... .  thank you very much for the compliment.

SHELDON.... .  lol.. it is catchy, I will give them that.  But how pathetic on the message, yet the delivery is good.  But have you noticed, they now have like 3 to 4 different commercials. This costs money and me thinks they are making some good money, off of something that is misleading.  Okay, you can go back to singing now...

Here ya go... all 6 commercials..  Free Credit Report.com Commercials

BILL.... .  I think we need to keep writing about this... you, me, and others... the power of the blog, reaching hundreds, if not, thousands. So, let's kick the sleazy advertisers back to nomads land. .. and thanks for the compliment.

CYNTHIA... . I think many of us feel the same way.  Hey, advertising is good... but to mislead to make money?  I consider this just as someone would bait and switch.  PS... did I tell you, that I like your new picture.

RUSS.... . it certainly seems that way.  It ticks me the hell off, yet the gov't cracks down on the GFE now, but for some reason, misleading advertising is okay....  hhhmmmm   thanks

TOM.... . so very true...  good thought on this.

HARRIS... . you don't trust any of my blogs?  lol   Seriously, it's scary out there, and how they mislead. Thanks for that very polite compliment, much appreciative.

FRANK & SHARON.... . overall, it's very frustrating. I know Facebook has to make money, but aren't these ads obvious to so many?  Or again, do so many turn a blind eye..??  thanks

JOHN.... .  I want more to chime in, those that have used these types of companies who advertised like this.  Thanks for bringing this up and confirming so much of it. I will add more of this to my part 2.  thanks

Good post, Jeff.  I was getting tired of a radio ad in my local market advertising a rate well below anything I could imagine.  So one day I decidied to listen to all the fast talking at the end, and noticed that the rates were from one month ago, which of course no one could get.  Someone else called them on their ad, and learned it was for a 15 yr. loan, which was not disclosed. 

We all know how a lender can mislead when you cherry pick the scenario to make it look as good as possible, like a 760 FICO, 50 LTV, impound account, and maybe even a 10 day madatory lock!  No one would be getting that rate - but they advertise the heck out of it - and we all know it gets the phone to ring - but I hate those practices.

Jeff,

I really like your word "Shark Advertising".  This is still going on out there folks and still with the big banks, but just with a twist.

I have a client that I am refinancing his home.  He stops by his bank to do some personal banking, deposit withdrawals etc. after meeting with me and they have some advertisement up that they offer a rate that doesn't exist.  How do I know this, he called me and we went over the situation. 

Turns out that the fine print did not state anything about him doing a Conventional loan vs. FHA and that he is doing a cashout refinance.  These 2 factors do make a difference to the rate.

This goes back to what we have talked about before and I am just glad you bring it to the talking points again.  This is a blog I wrote awhile back that covered this same topic and I feel is relevant to this discussion about deceitful advertisements.  Please Call Me, I am the Advertised Interest Rate

The point is exactly what you state, the buyers beware and understand that there still is really nobody enforcing anything that mortgage lenders do out there. 

There is one ad that is particularly misleading.  It has President Obama at a podium discussing the credit crises with scrawl across the bottom and if you don't look carefully for the fine print you think he is recommending you call the 800 number at the bottom.  It runs on CNN all the time.  It looks like a news clip.  I am surprised it is legal and that it continues.

Jeff, Thanks again for another great post on mortgages.  Every one shopping for a mortgage needs to read this post.

RICK.... . there you go, a 15 yr mortgage.  Imagine that.  And I love those low LTV,high fico score scenarios that companies flash, hoping that you don't pay attention to anything but the rate. And thanks for the compliment.

GARY.... . lol... I just kind of threw it in there after staring at the picture of the shark, as I was writing. I thought to myself... genius. lol... so thanks.  Overall, yes, for some reason it seems that nobody is enforcing any of this.  The gov't talks about regulating, but it seems like this advertising crap has gone on for decades. It just irks the hell out of me. Maybe some of these companies get shut down and open up another company under another LLC??

MIRIAM.... . bingo... that is one of the ones that I tried mentioning up top, that I have seen on ESPN several times also. That is extremely creative, but extremely misleading. It looks like Obama is endorcing this product and you have to know what you are looking for in order to understand what it is really about. Thanks for giving the details on this one.

JUDI.... . thanks and thanks for those kind words. Yes, many people do need to read this.  And we as a group have to keep writing about this.  It won't go away, so we need to educate. So please don't hesitate to reblog this either. thanks

This one is going on my outside blog for sure, thanks for checking the box!  I have been bothered by some of my competitor's advertising in regards to short sales but I will let sleeping dogs lie.

:)

I really don't know how these mortgage companies can sleep at night. As a loan officer myself, I struggle with these things every day, and I really don't know how to educate my clients to steer clear of the "too good to be true" ads like these you've mentioned. I lose clients over and over again to these liars, and they end up coming back to me because they realized I was being honest and fair. Then, at that time, they're in a rush and I'm made to look like the bad guy AGAIN for not closing on time. Or they end up settling with the "other guy" and being surprised at the closing table, and at that point, it's too late to get up and walk away.

Great post!

Like the old adage, if it sounds to good to be true, it probably is.

There is only ONE type of "mortgage company" that buys leads generated from internet ads, and that is a telemarketing boiler room. Boiler rooms require huge numbers of leads at the lowest possible price - and not because their profit margins are slim. Sifting through a large number of internet leads to find viable prospects is expensive, just considering the cost to call prospects, complete FNMA Form 1003, and purchase stripped-down one-bureau credit reports. Closing ratios are low, which means fees charged on loans that actually close are high.

Thus the motivation to stretch - or even break - the rules with aggressive offers, deceptive connections to Federal agencies/programs, and poor disclosures is economically built in to boiler room operations. State and Federal regulatory agencies have nowhere near the staff or resources to enforce regulations, so these firms will continue to operate.

Nothing replaces the security and value of a face-to-face meeting with a bricks-and-mortar banker or mortgage broker: someone with a solid investment in his/her reputation in the community and a long-term commitment to operate (just like a Realtor). Rates and programs are commodities like corn and wheat - if they are available, nearly any bank or broker can offer the same.

Shopping mortgage offers is important, but those who rely on internet, radio, or other cheap mass media for lender suggestions are simply setting themselves up for disaster.

RENEE.... . I am sure many are misleading in advertising when it comes to short sales and such also. Overall, I think this kind of advertising irks many of us.... and thanks for putting this on your outside blog.

ANDREA.... .  I do, it's called... "I don't care, I made money".....  I think overall, many of us have struggled with this, and have lost business to these people. But we can do something about this.  You and I can blog about this.. you can reblog this blog... the internet can be very powerful, even to educate the average consumer.  thanks for your feedback.

GABE... . yes, it usually is...  what I think happens is that some just hope they hit red or black, or that pot of gold... and got lucky with someone that might be honest in their advertising, because it sounded too good.  thanks

DEEP RIVER.... . still trying to understand the name that you used...  but I do appreciate your detailed input, as it took some time. For the most part, I will agree that a lot of this is set up by the boiler room mentality and I saw more of this from 2002 to 2005. But I will say that I even bought some leads from some online companies from 2003 to 2005, yet my clients still got the same pricing and rates.. with good service. And I know a company or two that have put together a group of 10 loan officers, that buy leads, but the fees are limited with good rates. 

In regards to those shop online... I do get 85% or more of my clients from the internet and have been for the last 2 years..... but it all comes from blogging.

Overall, you do make some excellent points. I just had to disagree with your very first sentence, because you can't say One or All.... but I would say many and or most.  And you bring up some great information leading up to why these lenders must charge so much.  It makes me think that you are a loan officer or were one?  And that you possibly worked for such a company before?  I know I worked for one for 2 months and then quit. They always advertised a 1/4% lower in the paper, and their fees were even higher.  I would cut these fees, but it hurt my bottom line then, while trying to give the borrower a good deal.   Thanks for your input and feedback... and I hope many read your comment.  thanks

Good article Jeff.  If I don't know the lender my client choses to use, I pick up the phone and start talk'n.  Too often the buyer gets told what they want to hear but don't know the questions to ask.  A good lender can be the difference between closing and not! 

I look back on every home I purchased before I got in real estate and feel I was ripped off on every single mortgage.  I sued a mortgage broker one time and got a $5,000.00 judgment in Small Claims Court and they got investigated by the DRE.

Great post Jeff! I can not STAND the commercial that makes it look like there is breaking news about the mortgage industry and you MUST ACT NOW! Are you kidding me? Gotta love the ones advertising rate when needing to be advertising APR. Sure you can get a 4% rate....... FOR 5 POINTS AND OURTRAGEOUS FEES WE DON'T TELL YOU ABOUT!

Really infuriating. Especially when you need to explain to your client why rates are different from what they are seeing advertised.

And now, I can't stop singing the "Free Credit Report Dot Com Baaa beee"......

Really, if it sounds to good to be true, it probably is!

Jeff:

"Deep River" is a name I've posted under for several years on a couple of mortgage related web sites, and I've kept it when posting on real estate related sites. Why? Primarily because anonymity prevents the appearance of solicitation when offering advice (I closed my small correspondent lender shop a year ago), and confidentiality is more important than ever now that most of my mortgage related work, although just a side business, is private underwriting services for former clients-turned-private-lenders and "expert witness" type work for a couple of attorneys. "Deep River", if you're really curious, is a nod to Oceanus from Greek Mythology. I live in a beach town and spend summers "on sabbatical", so to speak, running beach businesses, surfing, fishing, etc.

Many loan originators have purchased internet leads (myself included), and some of those LOs are honest and conscientious. Yes, you've guessed correctly... when I left my direct marketing career for the mortgage industry, my first employer turned out to be the Devil himself despite the fact the company was a national unit and volume leader.

It's the direct marketing background that gives me insight into the economics behind internet (or mass media) lead generation. Back in the day, I used to purchase millions of credit-derived data records on behalf of clients such as banks, card issuers, and captive automotive finance companies. Such carefully screened data and targeted advertising are expensive. On a mass scale, it is impossible to enjoy both a low cost per lead and a high closing ratio. Low cost leads means the cost of adding the "qualified" component is passed to the buyer of the leads... and eventually to the unfortunate consumer.

However, there is one true method of generating low cost, high closing ratio prospects for a loan originator. Unfortunately for the boiler room operations, personal referrals from friends, past customers, real estate professionals, accountants, etc cannot be purchased. They are earned by folks with a proven track record of performance, integrity, and providing value first... which is why I made such sweeping statements comparing internet originators versus local face-to-face originators.

This very blog is exactly the kind of "providing value first" that wins new referral sources and demonstrates a solid investment in reputation and long term commitment. Good luck, and keep sharing.

great post, deceptive advertising only makes all of our jobs harder when we have to tell people they are never going to get that teaser rate being put out there

Very annoying trying to be honest and ethical in a world full of dishonest people.  At least the honest ones can sleep at night.

You really have to be careful today both in print and on the internet when choose lenders. Thanks for the great update. Too bad more can't be done to police for the public.

This is a terrible development Jeff. Sad to say, that if I was not a Realtor, I would probably be fooled too.

Jeff - excellent post, unfortunately there are a lot of misleading ads out there for consumers. We reblogged this post to share with our readers (again - :) - love your posts!)

False Advertising of any kind is a hot topic for me right now.  It's incredible and appalling how some agents that are clueless when it comes to Short Sales boast of hundreds of transactions and high closing ratios - neither metric being supported by the MLS.

To those that I didn't get back to... thanks for your responses and for the compliments.

TONY.... . It does get under my skin, that this is a huge pet peeve of mine.  Thanks for your input and feedback...