Author Archives: Jillayne Schlicke

About Jillayne Schlicke

Educator in the field of mortgage lending and real estate. Follow me on Google+

The Future of Countrywide

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In the mid 1980s, I entered the mortgage banking industry at a company that some will remember: Rainier Mortgage, a division of Rainier Bank.  As banking deregulation opened up opportunities for large out of state banks, Rainier sold their mortgage operations to Goldome.  I was the youngest mortgage loan underwriter in an office full of 25 women. Imagine an office where every person chain smoked all day and the windows in the office didn’t open. As the last hired underwriter into the lion’s den, I knew I would be one of the first to be laid off when merger rumors started to fly, so I asked for a transfer to the loss mitigation department instead of taking the layoff.  The Foreclosure division was booming at that time and I learned a whole lot about human nature during my time there.  My innocence about the goodness of people was shattered; it’s shocking what people will do to a home when they are having that home taken away from them.

As the Goldome purchase of Rainier Mortgage continued to unfold, many, many people were laid off and Goldome eventually closed their offices here locally.  Some of my former colleagues are still in the mortgage business at various companies. They’re underwriters, loan officers, company owners, branch managers, and executives.

The proposed Bank of America buyout is a pretty low figure, 6 billion, considering Countrywide’s servicing portfolio, even with delinquent loans, is estimated to be 1.48 trillion.  This means that employee stock purchases will probably amount to zero.  Federally chartered banks have traditionally come in and out of mortgage lending in a cyclical way.  Most suit-and-tie bankers at the executive level do not understand what it means to go out into a community and walk into a real estate office and form relationships with Realtors.  Instead, the mortgage banking division’s employees are handed leads on a daily basis from the bank branches. 

BOA employees originate mortgage loans at the retail level from the banking branches with call centers taking loan apps. Recall that BOA closed their wholesale lending unit.  Knowing this, Countrywide employees will have a couple of options.  They may be asked to re-apply for their job (WaMu is famous for making all employees do this during every merger), relocate to a BOA mortgage banking center, or perhaps if Countrywide is better established at a more desirable commercial retail location, the branch will be left open, for now.

The fact that we are in a national housing recession is beyond debate.  Many economists are now saying we have already entered an economic recession, which makes Eleua’s wild predictions from earlier seem eerily prescient. If retail mortgage originations are expected to decline, then it would be safe to assume that those crunching the numbers would figure out how many people are needed at each position and then layoff double what is needed since reducing labor is a fast way to reduce expenses.

The other problem that is difficult to quantify yet easy to foresee is corporate culture.  BOA is purchasing a company where loan originators are paid in a radically different way than how banks pay their loan officers. Differences in pay structure, norms, hierarchy, beliefs, rules, shared power, openness of tolerance for each other’s corporate culture, and systems of motivating and rewarding employee behavior will lead to political clashes of will.  With company mergers, politics will lead decisions on who to keep and who to let go, and that doesn’t always mean that the top producing branch managers and loan officers will be kept. 

But who’s to say that the buyout will even go through?

[photopress:BOACW1.jpg,thumb,alignleft]BOA has some time now to look through all the books. The real value is in Countrywide’s servicing portfolio.  Perhaps that can be purchased instead.  Many, many companies during the last 10 months have first tried selling the company whole and many of those purchases did not go through.  If I held CWide stock (which I do not) I would want to know why shareholders would approve a sale price of 1 billion if the servicing portfolio was worth 1.48 trillion.

[photopress:BOACW2_1.jpg,thumb,alignleft]If I held BOA stock, (which I do not) I would want to know why BOA sees Countrywide as a good investment when most of their money was made during the real estate run-up, originating loans that investors do not want to purchase anymore. Why base the value of Countrywide on what they have been able to accomplish in the past 7 years?

[photopress:BOACW3_1.jpg,thumb,alignleft]This buyout offer could be a way for BOA to really get a better feel for all the possible positive and negative consequences of a purchase, both short term and long term.  Wouldn’t it make more sense for BOA to let Countrywide go into bankruptcy and then pick off the servicing portfolio at that time?  Any superstar branch managers and LOs will naturally be looking for work and then existing BOA managers can interview Countrywide people ahead of time for a good culture match. 

Then there are the billions in tax breaks that BOA gains from purchasing Countrwide, just like when they purchased First Republic Bank of Dallas in 1988, and I suppose cross-selling banking services and credit cards to that servicing portfolio would net some income, yet also adds expenses. Yes, Countrywide is capable of originating a billion each year in new retail originations, however, during that time, we experienced extremely lax underwriting standards. Many of those loans were originated by mortgage brokers through CWide’s wholesale channels.  There are few buyers on the secondary market now for anything other than conforming loans. The days of subprime broker originations and lax underwriting are gone and Realtors, builders, and consumers are surprisingly not loyal when returning for business, which is why a sales/service mentality is so important in mortgage lending.  Realtors, builders and consumers tend to like really good service, fast service, low rates AND low fees, all in one place, which is excruciatingly hard to do at a massive corporate bank, which is why hundreds of thousands of mortgage bankers left banking in the early 1990s and opened mortgage brokerage firms.

If BOA is buying 1.48 trillion for 6 billion, (they already put 2 billion into CWide so their latest bid is 4bil) perhaps this is a good investment after all, for BOA that is.  But not for the 50,000 Countrywide retail and wholesale employees. Matthew at blownmortgage reminds us why BOA closed their wholesale lending division, which does not bode well for Countrywide wholesale employees.  Take off the rubber wrist bands and start polishing your resumes and networking skills (like I suggested in August), before the WaMu retail employees land all the decent-paying jobs first.

Next up for discussion of course is the future of Washington Mutual.  Who would have known one year ago that we’d be talking about Countrywide and Wamu today?  Well, perhaps Angelo Mozillo and the CWide executives knew. Take a look at their stock sales.

Washington State Loan Originator Licensing Update

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[photopress:LOLicensing_1_2_3_4_5.jpg,thumb,alignright]As of November 14th we had roughly 15,000 loan originators who had received an interim license during the year 2007. These licenses expire on Dec 31, 2007 and license renewal is conditioned upon them passing their competency exam and completing two continuing education courses, one of which must be an ethics course. At the November 14th Mortgage Broker Commission meeting, we were told that out of 15,000 LOs, there were only about 5,000 who had taken their competency exam.

The new loan originator exam was introduced in June andthe exam candidates were given a 600-question study guide along with the answers to the test questions. The LO exam is 100 questions long and candidates must pass with a 70%. One to two percent of the students that attended my exam prep course had actually read the entire 600 question study guide. Less than half of one percent of the exam candidates that came through my classroom had read the state law to which they’re subject to, the Mortgage Broker Practices Act. The pass rate for the LO exam currently sits at 89%. This means the exam is too easy. For those that did not pass the first time, the second try pass rate for them was 71%.

As of December 19th, WA State Department of Financial Institutions (DFI) reported that only 1,900 loan originators had renewed their license. At this point, we can try to project attrition numbers before the actual figures are released from the state which will likely be at the next Mortgage Broker Commission meeting, date TBD.

If there were 10,000 LOs who had not tested between mid November and now, and if we know that 1833 LOs are not physically located in WA state and could likely find a Promissor testing center near their city, then we’re left with 8,167 LOs that needed to take their exam before Dec 31st. I suppose if every testing center across the state was filled with exam candidates between Nov 14th and today, they all could have made it. I think not.

LOs were reporting up until mid December that many of the testing sites were not completely booked when they took their exam. I had been predicting LO attrition to be about 2,000 since the meltdown began. Now I believe we could see further LO attrition, up to 4,000. This will consist of LOs who haven’t closed a loan in many months and who have found other employment, LOs who were only originating subprime, LOs who have chosen to work for a retail bank or consumer loan lender not subject to licensing, LOs who were not able to pass the background, fingerprinting, and felony checks, and LOs who have just simply de-prioritized the licensing renewal requirements.

LOs who do not pass their exam, complete their two required courses, and renew their license online must stop originating (scroll down to numbers 18-22) at midnight on Dec 31, 2007 and transfer all files in process to their broker or another licensed loan originator. LOs will have 45 days to pass the exam and complete the required CE classes while originating NO loans. After Feb 14, 2008, if a LO has not passed the exam and completed his or her required CE, the interim license will expire and the LO will need to start the application process all over again from the beginning and must wait until their new license arrives from DFI before being able to do the job of, and earning fees from loan origination. There are no exceptions; not even one loan. New LOs entering the industry on Jan 1, 2008 may not originate until they pass their exam and receive their license from DFI.

I receive an interesting phone call from a student late Sunday afternoon. She was once again canceling her attendance at the Dec 31st ethics class, and for the third time, was asking me to move her into another class. I made sure she realized that if she didn’t finish up by midnight on Dec 31st that she would have to stop originating. Here’s what she said; “Oh, yeah, I know. I haven’t taken my test yet either. Can you put me into a Jan class please, and sorry to have to reschedule on you again.

Recent Mortgage Fraud Developments and Future Outlook

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Before we use to rely on automated underwriting systems and credit scores we had humans who would carefully underwrite mortgage loan files. During the caveman human underwriter days, loan originators and loan processors knew that underwriters could make or break a file. An underwriter had god-like power to grant or deny the American dream. They had minds like a detective and long-term memory capabilities of an autistic child who can recount the entire screenplay of The Incredible Journey along with all the background noises. Underwriters knew which loan originators had a history of submitting fake gift downpayment letters because they would all sit and chainsmoke together in an un-vented room for 9 hour straight comparing sob stories from loan originators whose files were denied. After work, they would saunter off to network with other underwriters from other banks at a local bar or Mortgage Banker’s Association meeting, same/same. Any fraud that a loan originator tried to pull off was easily sniffed out, with the LO retreating for a while and eventually leaving the company due to the ice cold group shun effect. There were no stated income loans. Two years of tax returns, a P&L and a balance sheet were brought in to underwriting and a few days later, an underwriter would hand the LO a sheet of paper telling the LO what number to use as income for qualifying purposes. If the newly self-employed could not qualify, that person found a co-signer, usually a parent.

Yes, I was an underwriter back in the mid 1980s, and I was the youngest underwriter on staff. I was recruited from processing because I use to submit my files already underwritten along with the conditions for loan approval. What was apparent to me even as a 23 year old was that if my boss had to report to the same person that was in charge of sales and production, every file would have been approved. But she reported to someone else. It was that person’s job to make sure we were making good credit decisions. The goals of production and risk are in harmony, if you take a long-term look at the possible consequences of making credit decisions that are too far out of balance either way. Each part of a mortgage company needs the other part to maximize good consequences for all.

[photopress:stated_income_1.jpg,thumb,alignleft]Recent Mortgage Fraud Developments

The outlook for mortgage fraud across the United States is grim. I started this series at the end of October with background research conducted by the FBI that concluded that the most damaging mortgage fraud consisted of many people in the industry working together; fraud for profit.

As of today, I am no longer convinced that fraud for profit is the most damaging kind of mortgage fraud.

Today I believe if we put all the out-of-work underwriters back to work and opened up all the loan files in the defaulting tranches of subprime, Alt-A, and prime loans, we would find the same kind of problems that Fitch, the ratings agency, found when they re-undewrote a small sample of 45 early default loans from the 2006 vintage. Now granted, this is a small sample. However, after working within corporations most of my adult life, I also know that the public really never hears how bad things are. The name of the report is “The Impact of Poor Underwriting Practices and Fraud in Subprime Residential Mortgage Backed Securities

Mortgage Fraud Case Studies

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We’re lucky to be living far, far away from the mortgage fraud happening in other parts of the United States, right?  Not so fast. In part two of this three part series, we’ll take a look at some mortgage fraud cases in Washington State.

Case Study: Century Mortgage; How to succeed in a down market and earn six figures your first year with no experience.
This case involved a mortgage broker, loan originators, a Realtor, an escrow closer, and an appraiser.  Homes in a Spokane neighborhood had been on the market for many months with no sale.  The mortgage broker talked the Realtor into taking the homes off the market and then relisting them with an increased price.  Straw buyers were found; people who could not otherwise qualify to purchase a home but wanted to become homeowners.  The terms were as follows: 80% first mortgage loan and a 20% second mortgage carried back by the seller.  The mortgage lender was very happy with the 80% LTV loan. At closing the seller’s second mortgage was discounted to $1.00 and paid off.  So the lender believes they are making an 80% LTV loan when they are really making a 100% LTV loan.  Of course the home must appraise for the higher amount so the appraiser made some extra cash off of each on of these deals as did the Realtor and escrow closer, for knowingly hiding the facts from the lender.  The Century Mortgage scheme (no relation to defunct subprime lender New Century) was played out in many neighborhoods in the Spokane area.  The mortgage broker, loan originators, Realtor, closer, and appraiser all lost their license, and banned from the industry for life or for a specified number of years, and some were sentenced to do jail time in the federal pen.  What concerns me about this case is that this could likely happen again because this scheme needs one important element: desperate sellers.

Case Study: Property Flipping; How to get rich quick and then go directly to jail
Ekram Almussa and Josh Kebede bought homes in Seattle and on the Eastside, and sold the homes in a matter of days and sometimes hours later, for thousands more. Here’s an example of how it went down: They would purchase a home for, say, $315,000 and hire an appraiser, the same one each time who magically finds that the home is worth $415,000.  The homes are sold to straw borrowers whose names show on title and on the new mortgage documents, but agree to make payments to Almussa and Kebede, who in return promise to pay the mortgage.  All the loans were owner occupied, but none of the properties were occupied by the owner of record. All the loans were sent to the same underwriter at the now defunct subprime lender New Century, Almussa and Kebede’s lender of choice each time. Almussa and Kebede pocket the $100K, plus the mortgage payments that went into their pocket.  Both Almussa and Kebede were arrested and pleaded guilty to federal fraud charges. John Gonzalez, who helped verify employment for the straw buyers, decided to testify against them.

Case Study: Church is where the sinners are
Liza Bautista was a mortgage broker with a strong client base inside her Christian church in Tukwila. After successfully closing several prime loans for folk with A-paper credit, she targeted consumers who were turned down by lenders in 2005 and 2006 (Hello? Who couldn’t get a mortgage in ’05 and ’06?) and created two sets of loan [photopress:liza_1.jpg,thumb,alignleft]documents.  She submitted the credit history and identity of her prime, A paper clients to the lender funding the loan.  When it was time to sign papers, she forged her A paper client’s names on the loan documents and sent everything in for funding.  For the poor credit clients, she hand carried a second set of documents to be signed and then made a special offer to personally hand carry their mortgage payment to the lender each month.  (Note to consumers, don’t ever agree to this.) Of course, the payments never made it to the bank. Liza kept the money and subsequently, the lender started to foreclose on the A-paper owners, whose name appeared on title as the owners of record. When the A-paper clients were finally contacted by the lender and claimed they did not own said house, Liza started running out of places to hide.  The poor credit clients who were thrilled to be homeowners were obviously upset that their name were not on the title to the home and they were evicted after foreclosure.  Liza has lost her mortgage broker’s license. Rumor has it that she is still originating loans under a different name. From a quick search of the King County Court records (search by her name) you can see several court actions indicating the A-paper former clients have sued and won. The escrow company that Liza used had been operating without a license at the time.

As you can see, the most egregious cases of mortgage fraud are more than just a single person acting alone. There is usually a charismatic ringleader who recruits others. Sometimes the ringleader will target new or financially struggling loan originators, Realtors, escrow companies, and appraisers, who are all offered additional cash for participating.

The question that remains is how many defaults/foreclosures are the result of large-scale, organized mortgage fraud, and how many are the result of much smaller scale fraud that likely won’t see prosecution.  There never has been nor will there ever be enough government resources to regulate every single transaction written by every single industry person out there.  It is up to us to help point investigators in the right direction. 

Consumers as well as those of us in the industry can report mortgage fraud tips by following this link.

On CalculatedRisk, I recently read a blog post about securities rating agency Fitch (link opens the 11-page PDF report and requires site registration, but it’s free) opening up 45 loan files inside one of the failed CDOs, and guess what they found? Mortgage fraud galore and very shoddy underwriting which I will outline in Part 3.

Part 1 Mortgage Fraud Basics
Part 2 Case Studies
Part 3 Recent Mortgage Fraud Developments, and Future Outlook

Mortgage Brokers and Loan Originators Should Support HR3915

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Why am I not surprised that mortgage brokers are in a panic over HR3915, the Mortgage Reform and Anti-Predatory Lending Legislation? Back in January, Barney Frank gave everyone ample notice that he was committed to passing anti-predatory lending legislation before the end of 2007. Then the subprime meltdown began, setting a political stage for a perfect storm, putting mortgage brokers right in the path of harm’s way. Bush, your weapons of mass destruction are in the hands of Congress. Or so the mortgage brokerage industry would have us believe.

The fear racing through the brokerage community is rampant.  Wide-eyed loan originators are dragging themselves into my classroom looking like Iraq war veterans needing post traumatic stress disorder talk therapy, and the bill hasn’t even been put before the full house for a vote yet.   Let’s see if we can identify where all the fear is coming from.

Establishes a Licensing System for Residential Mortgage Loan Originators
We already knew this was coming. Chuck Cross with the Conference of State Bank Supervisors has been working on national loan originator licensing for months. Even better, the current proposed version of HR3915 says we’ll be keeping track of all LOs, including loan originators who work at federal and state chartered banks. This is what the mortgage brokers have said they want.

Creates a Residential Mortgage Loan Origination Standard
There’s nothing inside this paragraph that sounds too scary.  Licensing? Full disclosure? LOs are already required to do these things. What’s next? Oh, here it is:  Anti-Steering.

Anti-Steering
“For mortgage loans that are not prime loans, no mortgage originator can receive, and no person can pay, any incentive compensation (including yield spread premiums) that varies with the terms of the mortgage loan (except for size of the loan and number of loans).  Regulations will be promulgated to prohibit mortgage originators from (1) steering any consumer to a loan that the consumer lacks a reasonable ability to repay, does not provide net tangible benefit, or has predatory characteristics, (2) steering any consumer from a prime loan to a subprime loan, and (3) engaging in abusive or unfair lending practices that promote disparities among consumers of equal credit worthiness but different race, ethnicity, gender, or age.” Let’s try to analyze why mortgage brokers and LOs are so upset about this provision. For the past year, LOs on this website have fallen all over themselves telling us how they don’t do any of these things like (gasp!) steering consumers from a prime to a subprime loan IN ORDER TO MAKE A HIGHER YIELD.  So, if you good guys out there didn’t steer or originate loans with predatory characteristics, why are you so mad about this bill? You keep saying you want the bad guys out of the business. If it’s true that you’re not doing any of this stuff, then why all the whining? If the subprime market weren’t already dead enough, this bill will put the nail in the coffin. But don’t be fooled. Instead of subprime, the loans will be called something else.  When there’s money to be made, the creative mind knows no boundaries.  This provision gives mortgage brokers and LOs exactly what they’ve been telling us they want: the end to the abuse of YSPs.

Ability to Repay/Net Tangible Benefits
“Requires creditors to make a reasonable determination, at the time the mortgage is consummated, that  the consumer has a reasonable ability to repay the loan, or;  for refinancing, the refinanced loan will provide a net tangible benefit to the consumer.”

Well I call “reasonable ability to repay

Washington State Loan Originator Licensing Update

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2007 is a transition year for loan originators who work for a mortgage broker in Washington State.  These folks have received an interim license with a Dec 31, 2007 expiration date.  The license is conditioned upon LOs passing a competency exam, completing two continuing education courses (one of which must be an ethics course), paying the required annual fee, and completing their required renewal paperwork by Dec 31, 2007.

If loan originators complete their two required CE classes and pass the exam by Dec 31, 2007 but fail to renew with their state regulator, LOs will have 45 days to complete the renewal paperwork with DFI and will be assessed a 50% fine for completing the paperwork late.

[photopress:LOTest.jpg,thumb,alignright]If a loan originator does not complete the required two CE classes and pass the exam by Dec 31 2007, the LO must cease originating loans and transfer all files to his or her broker or another licensed loan originator.  The LO will have 45 days to pass the exam and complete the required CE classes while originating NO loans. After Feb 14, 2008, if the LO has not passed the exam and completed their CE, the interim license will expire and the LO will need to start the application process all over again from the beginning. After Feb 14, 2008, LOs must wait until their new license arrives from DFI before being able to do the job of, and earning fees from loan origination. There are no exceptions; not even one loan.

The consequences of not completing the continuing education and passing the competency exam by Dec 31, 2007 are not pleasant.  Read more about license renewal from the state rules.  (Scroll down to numbers 18 through 22.)

DFI is reporting (link opens pdf) 11,114 interim-licensed loan originators in Washington State with an additional 3956 applications pending for a total of 15,070 loan originators. So far, only an estimated 2000 loan originators have taken their competency exam. That leaves 13,070 who still must pass their exam by Dec 31, 2007 if they want to avoid paying the 50% penalty.

If we remove the 1833 LOs who originate Washington state loans from out of state, then we’re left with 11,664 originators who are physically located in WA State. Promissor, the vendor delivering the exam, shows seven exam sites located around Washington State. We have 46 test-taking days left in 07.  Theoretically, if 254 LOs took the exam every day (36+ LOs per test site) they could all make the deadline.  The real question, is: will they do it?   One of my students called me yesterday to report that she passed her exam, but that there were only 3 other LOs taking the exam along with her.

The pass rate is reportedly 89%.  To me, this means the test is too easy, so why the delay? Are LOs just behaving like stereotypical sales people and putting it off until the last minute? Are folks not concerned about the 50% penalty and they’re going to put it off until January and February? Are we in for some mass attrition?

Realtors: If you refer consumers to a loan originator who works for a mortgage broker, inquire about the status of the LO’s interim license. You don’t want your client’s loan file to be transferred to another originator mid-stream.

FHA: A Siren Who Just Might Break Your Heart

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It’s an FHA love fest! We have national trade organizations smiling and shaking hands with members of the House and Senate over proposed legislation to modernize FHA.  The House approved the bill, suspiciously titled “The Expanding American Homeownership Act of 2007” (I guess “FHA Reform” might have hurt FHA employee’s feelings). This bill will provide some nice upgrades such as increasing conforming loan limits, reducing downpayment requirements, simplifying approval requirements for condos and co-ops, and allowing people with little credit history to use, for example, utility bill records to establish a credit history.  Now we’re waiting on the Senate where opinions differ.

I don’t mean to spoil the FHA happy party, but FHA loans ranked as “seriously delinquent” are higher than subprime ARM loans right now in Washington state as well as overall in the U.S.

See page 13 of this PDF, released last week at the Wash Assoc of Mtg Brokers state convention in Bellevue:

So what do rising FHA delinquencies mean for real estate agents?

Lenders must fully underwrite FHA loans.  If a loan goes into delinquency, the lenders must take a look at what happened:  Lenders and FHA-approved underwriters are held accountable for their bad underwriting decisions. 

What the industry use to do: sell that homebuyer a subprime ARM underwritten on the initial teaser payment rate, which made their debt-to-income ratio look great.

Worse, the industry might have shoved that person into a stated income loan where the borrower “magically” comes up with an income figure that comports with a decent debt-to-income ratio.

This transferred the risk away from the lender and onto the borrower “if” the borrower is unlucky enough to get prosecuted for mortgage fraud.  Stated income subprime high LTV loans are now gone. We’re now living through the painfully obvious proof that borrowers make lousy underwriters.

That risk now falls back on the lender. If the loan defaults, bank auditors and examiners call into question the decisions made by the underwriters.  Recall that with a stated income loan, the borrower inflated the income so the debt-to-income ratio looks great to auditors. With fully-underwritten FHA loans, the bank can go back and examine the decision. Speaking as a former underwriter, banks and their underwriters are not thrilled about re-living their underwriting decisions. If FHA delinquencies continue to rise, banks are going to tighten FHA underwriting policies, as they well should. 

[photopress:FHAsiren.jpg,thumb,alignright]Realtors following this thread ought to continue to be reminded that the “anyone can get a loan” party is OVER and FHA ought not be thought of as an easy and fast way to inject corpses with an FHA drug to bring them to life as first time homebuyers.  Said another way: just because anyone, even zombies, could have received a subprime loan in 2006 doesn’t necessarily translate into FHA-approvable borrowers in 2007 and 2008.

Realtors, add some time to the “loan approval” section in the purchase and sales agreement and please make sure that the FHA borrower is working with 1) a federally chartered bank with current FHA approval (state chartered banks may or may not have this in place); or, 2) a mortgage broker that ALREADY HAS FHA loan approval.  This would mean a medium to large sized mortgage brokerage firm, preferably with an FHA-approved underwriter on staff locally.

If your client is working with a mortgage broker, Realtors: query the LO to see how much experience the LO has with originating FHA loans.  Why let an LO practice on your file? Also, some mortgage brokers might have rules in place that direct the loan originator your client is working with to transfer your borrower’s FHA loan file to a main office. Check on this ahead of time.

Deceptive Radio Advertising in Mortgage Lending

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Because of the enormous amount of deceptive direct mail, Internet, and email spam advertising currently taking place in mortgage lending, for this blog article, let’s focus on radio advertisements.

Every city I visit, loan originators and brokers complain about deceptive radio ads running continuously, making claims that may or may not be true, slamming the competition, and barely if not at all complying with advertising requirements set forth in the federal Truth-in-Lending Act. When I was in Vancouver WA recently, LOs told me there’s an ad running that says something like this: “If your mortgage broker charges any fees at all, they’re predatory lenders.