"Sunshine Blowers" Can Cost You Money on a Mortgage

[On the Road]

Yahoo Finance Q&A

Q: When I called numerous lenders and mortgage brokers asking for rates and points, I received quotes that varied widely. My wife suspects some of these quotes are phony. What's the point of phony quotes, and how can they get away with it?

A: Your wife is right. The more attractive the quote, the more likely it is phony -- meaning that the lender or broker has no intention of honoring it. What's the point? To rope you in.

If you are purchasing a house, the cost of terminating the process with one loan provider and starting again with another becomes increasingly high as you move toward your home closing date. As your bargaining power recedes with the passage of time, you become increasingly vulnerable to various tricks for increasing the price.

Loan providers who offer phony quotes figure once you are in the application process, they have a good chance of landing you as a borrower.

---snip

http://loan.yahoo.com/m/q_rely.html

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Has anyone else run into this? I was trying to borrow on two small investment houses last year and kept getting good offers that were changed at the last minute because of credit rating, location, or some other information that was shared at the very beginning of the process.

Wells Fargo was one of the worst. Their offer changed four times -- the final offer being a 10.5% interest rate with four points. Another mortgage broker made an offer in which the upfront costs amounted to 15% of the principal.

Luckily, I finally got a great loan from Bank of America -- God bless them. They turned my down at the local branch, but their national phone number offered a 15-year loan at 5.89% with closing costs of only $700. Good appraisal, too.

But I suffered months -- lost sleep, felt like and idiot, and spent several thousand in unnecessary consumer interest -- while getting jerked around by these dishonest practices.

[rangerfan]

1. My son worked for Wells Fargo.

He worked the phones for loans and quit because of the unfair practices the pressured him to use. He's out looking for a new job now at another, hopefully more customer oriented bank.

[On the Road]

2. Glad to See That Confimed

The first time I thought it was a mistake. After six similar experiences I started to get the picture. If it were actionable I would file a class-action lawsuit.