My phone rang early in the morning on Friday. Nobody calls me early in the morning unless they’re on the east coast. I glanced at the phone: Area code 202. Who do I know in Washington D.C.? Turns out it was Allen Huffman who works for Senator Dorgan. Apparently the senator is working on federal mortgage reform legislation, needs examples of deceptive mortgage advertising, and Allen found me here on RCG. This is what I sent Allen on Friday:

Here is a link to the story on Linden Home Loans. Inside this article there’s a link to the deceptive radio ad and television ad.

Here is a story about deceptive banner ads, from lead generation company Lowermybills.com

This website has pages filled with deceptive lmb.com banner ads for you.

The payment advertised on the banner ad in this example, once you clicked all the way through, was for a pay-option, interest only, negative amortization ARM loan. For a fully amortized 30 year fixed loan, the payment would be around $3,000. The web viewer would not see all the fine print unless they had already applied for the loan and scrolled all the way down to the bottom of the fourth or fifth screen. Very deceptive. I believe LMB is still running ads. Now the banners are advertising a drop in the “federal funds rate.”

Many, many banks, consumer finance companies, and mortgage brokers purchase leads from lowermybills.com. Lowermybills.com doesn’t make loans. Instead the company sells consumer information over and over again.

I have always considered that it was not in the industry’s best interest to purchase leads based on deceptive advertising. All this does is circumvent an honest company’s own attempts to advertise in a fair manner, the way the federal truth in lending laws were designed. If I were to come up with any new ideas for industry reform, I would want the industry to be held accountable for the advertising used to gather the leads purchased.

So for example, take a look at the mortgage spam in your spam bin. Have you ever clicked on those links? They will take you to a website that appears to be for a mortgage lender. But in reality this is a lead generation website. A homeowner’s private financial data is then sold to multiple loan originators who contact the homebuyer or refinancing homeowner over and over again. If the homeowner does not respond, then the lead is sold again and again. I am asking the question: Shouldn’t mortgage banks and brokers be held accountable if the LEADS they purchased were gathered using deceptive advertising? Lead generation companies should be held to the same standards within the federal Truth-in-Lending Act that banks and brokers must abide by.

Here is a very good example of a deceptive website. This person, Jennifer Hershey doesn’t exist. There is no place on this website to contact the owner of the site, we have no idea if this person is licensed to originate mortgage loans in any state, and there’s no company licensing information on here at all. Instead, this appears to be a “front” for a lead generation website.

I also have a growing collection of junk mortgage faxes advertising note rates from 1% all the way up to 5% for a “fixed” mortgage, showing monthly payment information that looks like an obvious pay option, negative AM, interest only ARM. No APR, no company information, no phone number for how to contact the company. The only phone number on the fax is a 1800 number answered by a telemarking person taking loan applications. This person is not a licensed loan originator How do I know? I asked her. She said she works for 20 different mortgage brokers.

People, now it’s your chance. Allen at Senator Dorgan’s office says to email or fax your deceptive mortgage spam, letters, websites, banner ads, and if you have links to deceptive radio and TV ads, he’ll take those, too. Today I received his permission to publish his contact info.

SEND DECEPTIVE MORTGAGE ADVERTISING HERE:

allen_huffman@dorgan.senate.gov
Fax: 202-224-1193