Comments on: Deceptive Radio Advertising in Mortgage Lending

By: Chris Hyde

Chris Hyde — Wed, 16 Apr 2008 23:50:16 +0000

It sounds to me like the ethical mortgage brokers and loan officers in the industry need to work hard to educate the public…probably one client at a time…about the misleading advertising that is going on out there. Doing so is difficult because so many consumers simply “shop rates”. But hopefully, though this meltdown, truth can be heard and integrity will stand.

The L.O. who is mentoring me in the business has built his reputation on truth and integrity. That has paid off and his business is VERY profitable and well-known in our area. He doesn’t have to rely on deceptive advertising or any other gimmicks to bring in customers. Word-of-mouth has been the way he has built his business because people trust him. May we all grow our businesses that way!

Thanks for sharing about the deceptive advertising that we all hear regularly!

By: Jessica Kristine

Jessica Kristine — Wed, 16 Apr 2008 23:46:48 +0000

Maybe I was one of the naive ones, but I didn’t realize what a bad reputation the mortgage lending industry had until I started this class. I think there’s a lot of opportunity here. I especially like your suggestion that firms be respectful of each other in their advertising as well as truthful.

By: Dale Uesonoda

Dale Uesonoda — Sun, 13 Apr 2008 23:50:16 +0000

Every day when I am out on the field, going back to basics, hitting the pavement, realtors shops, buisnesses, etc, I find myself talking back to the misleading mtg radio advertisements that I hear repeatedly with such disbelief and disgust. I should be use to hearing it but working everyday as a professional trying to generate new business, it is just frustrating to know lenders/brokers are spending tons of money putting out ads like that and at the end of the day, closing loans to uninformed and helpless consumers. I certainly will next time do my part and pick up the phone and call these companies and also every opportunity I have, I will make sure anyone I discuss mtgs with are aware of the false advertisements out there and to be aware. Thats the least I can do.

By: Roger Ingalls

Roger Ingalls — Fri, 04 Apr 2008 22:54:08 +0000

Hey, has anybody noticed the lenders that have started advertising ONLY the APR, and NOT the terms.

I have seen and heard some crazy low APR’s, that CANNOT be had with a 30 yr fixed (TILA, Ditech, etc).

Let me us know.

By: Jason "Jack" Lowry

Jason "Jack" Lowry — Thu, 27 Mar 2008 21:02:39 +0000

David asks:

“The real issue here is how to come across as being the one telling the truth. Is there a way?”

Jillayne replied

“Sure. It’s called telling the truth. But how would that sound on the radio?”

The person I think who has sounded more honest than any other on the radio was FDR. His Fireside Chats were the voice of honesty, integrity, & hope to a generation of Americans.
If I could sound like and deliver a message like that to the American borrower I’d corner the market.

By: Casey Camby

Casey Camby — Sun, 23 Mar 2008 23:58:13 +0000

First we have to realize what advertising is. When spending money like that you need to have something that grab’s attention from the masses, separates you from the competition, and gives the person in need a reason to call you. If you’re like me when you hear add from a mortgage professional that is negative or may give us a bad name I cringe. Sometime you have to get creative to grab attention and get people to call. If the intent of the mortgage professional is good, the add doesn’t give our profession a bad name, and the add abides by state and federal regulations its ok to be creative. But there’s a fine line that shouldn’t be crossed!

By: Gina Kwon

Gina Kwon — Sat, 15 Mar 2008 07:59:47 +0000

We as LOs definately need to better inform our clients how the industry works, not just to educate them, but to protect them from predatory and misleading advertising. When consumers know what to look for in an honest LO, they will know how to spot the bad apples. Self regulation is indeed necessary for the mortgage industry, as is the case in other professional industries, but to make it happen we need to work together.

By: Neal S

Neal S — Fri, 14 Mar 2008 06:54:13 +0000

I do marvel at all the advertising, still running, for mortgages in the media. The ads are largely an embarrassment to the industry. I cringe when I hear the outrageous claims & promotions for zero-cost loans & low, low rates…then to hear the firm quote the TIL as some means of making creditability for themselves & cloaking themselves in a document with an attractive name. My friends have commented on the proliferation of the radio ads & inquire why they are run so often. The ads create the impression that there must be lots of commissions in there loans, I suspect, otherwise why would they run so often? Jillayne’s point is well-made, do we hear the same type of ads for other ‘professions’; nope. Why not? I suspect the money in lending is the primary motivation for the on-going advertising. A wholesale representative, no longer employed, btw, told me of loan originators making $25K on a single loan…whoa! No wonder, this must drive the ads. I worked for a firm that ran such radio ads, the loan officers were told of the timing & to be around the phone, it was required actually. This type of practice only contributed to attracting the less-than-ethical mortgage brokers seeking only to pad their own pockets with high commissions. I was saddened by such tactics as clearly the loan officers were not seeking the best interest of the clients, only more money. The now ever-more popular & growing FHA loans, with stricter requirements, to replace the former sub-prime loans, should add to the reduction of fraud & abuse we have seen in lending. As the only outlet for low down payment purchases I hope the FHA will, in effect, eliminate the sub prime blow-ups.

By: Taren Bjorgo

Taren Bjorgo — Thu, 13 Mar 2008 00:06:01 +0000

Cheaters never prosper……I just cringe when I see a commercial on TV or a radio add about the 1-3% rates……who wouldnt call but alls it is, is just a tactic to get you in the door! To speak the truth is to speack volumes…..and as soon as everyone understands that…at thawt moment we will begin to take society out of the shadows and into a world where our word actually means something again!

By: Jillayne Schlicke

Jillayne Schlicke — Wed, 12 Mar 2008 01:35:05 +0000

Hi Thayne,

Yes. The way is for mortgage brokers/LOs to be honest in their advertising as required by the state’s Mortgage Broker Practices Act.