Isn't it annoying to get all that junk mail from companies trying to get you to apply for a home mortgage? This is a typical letter from our readers:
"I keep getting pre-approved mortgage offers in the mail (several a week), and this makes me very uncomfortable. Many of them are from out of state banks or companies I have never heard of. I have been told there is a way to keep these companies from sending me these offers or inquiring about my credit, but no one has been able to tell me how I should go about this. Is there an address or phone number I can contact to take care of this?"
Getting off a Telemarketer’s List
When a telemarketer calls, document when and where they are calling from and ask them to please put you on their “do not call list” (use those exact words). According to federal law they are not allowed to call you again. If they persist and continue to call you, you can make a report to National Fraud Information Center.
Junk Mortgage mailers:
You can write to Experian Consumer Opt Out: 701 Experian Parkway, Allen TX 75013 or call (800) 353-0809 (one call or letter gets you off all three bureaus).
I have received numerous calls from my readers claiming that they had just gotten a loan from a telemarketer or from mortgage mailers. One of them had given me full details of what occurred when she applied for a loan thru them. A call was initially received from a telemarketer and when the client replied, a representative got some information and advises that a service loan representative would call her back. One did, and after getting all necessary information they offered her a rate that she thought was good. Their processing time was very quick, within about a week and a half, the loan representative called again and said that she had been approved and that the papers are ready for signing. They scheduled a signing date, once all documents are laid down; the borrowers noticed that her closing cost was sixteen thousand dollars ($16,000). She then refused to sign; a manager called and threatened to sue the borrowers for a commission. The borrower then thought she did not have a choice and followed his instructions and signed. Now, they are closed and the commission was paid to the mortgage company from Michigan.
One lesson to be learned from this, Real estate lending law varies from state to state. Not only that, a mortgage company could be governed by Department of Real Estate or Corporations. There are major differences is all governing bodies.
I tried to inquire about mass mailing myself for my business, I found out that it is not important what you can offer the clients but how you can draw them in to you and then close them. These companies sometimes sell your information for pennies, they send out millions of mailers and when someone calls, they have professional closers to tell you anything you want to hear just to get your business. The percentage of closing if very low because most of the people hate telemarketers and mass mortgage mailers. That is why these companies always try to come up with innovative ways to send you mailers or call you.
With mortgage business slowing down, I am sure the telemarketer and the mortgage mailers will increase.
I recently got a call from a telemarketer who does not know I was in the business; I played along with their sales pitch and wanted to see how good they are in trying to get me a loan. They were offering a 1% loan with no discount points. I started asking deep questions like, what are the margin, indexes and the life cap. The representative tries to stir me into mostly the low payment that this loan offers. I ask if there was a negative amortization (increasing principal balance) on this loan. They clearly said “NO” and said that I have options and again tried to focus on the low payments again. I then ask for a good faith estimate to be sent to my fax number, I got it after 3 days. I then noticed that they are charging me an origination fee of 2%, I ask the representative about this and he said that he already gave me a discount for not charging me a discount points.
In my business, they are the same fees and that is a huge deception. I then went down the list of other closing costs: there are about $1800 in other miscellaneous fees. I then called and said I was not interested anymore, the same scenario happened, another person came into the picture and tried to talk me into this loan. He gave me some discount and said that we are ready to close. I asked this person about the negative loan, he explained it a little better but kept directing me to the minimum payment that is low. I then said I am not interested. The person I spoke with was a manager and got frustrated in trying to close me and then hung up on me.
Don’t believe your mailers or telemarketers; they are just trying to talk you into putting money into their pockets. Be very careful, so far I have not heard of a good deal with one of those specialty marketing strategies. Best to always get all details of the loan in writing and not verbal.
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Ken Go has been running his southern California home loans business since 1987. His honesty and courtesy equal loyalty to his customers. Forget about "good faith estimates." With 1st Innovative Finance Group, all loan rates and fees are guaranteed upon application. Ken Go writes a California home loans blog for anyone who might want free advice about financing a home with a mortgage. Ken speaks English, Chinese, and Filipino (Tagalog).
