Bait and switch

The bait-and-switch loan rate scam is a tactic used by unscrupulous mortgage lenders to lock borrowers into loans they otherwise wouldn’t choose. Here’s how it works:

A lender will conditionally offer a homebuyer pre-approval for a loan pending a full review of their credit. However, what they won’t mention is a small item stated in the terms of service: the homebuyer’s deposit required to start the application process will become non-refundable should they choose to back out after a specific date.

The lender then reviews the buyer’s application and will approve them for a loan, but at a higher rate than initially quoted. Many people don’t read the terms of service unless expressly told to do so (and an honest mortgage broker would encourage their clients in this direction).

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The best thing I can do for my client is to maintain a list of reputable, reliable lenders in my area. Doing business with reputable lenders, my clients and I can avoid falling victim to this fine-print scam.

I remind my clients that the mortgage industry is made up of humans, some more honest than others. My list is a group of people I’ve worked with directly, and I can vouch for their skill, care, and competence and feel comfortable referring my clients to them.

Remember, as a real estate agent, I’ve got skin in this game too. Using high-quality, reliable lenders results in a higher loan approvals rate for my clients, plus more successful closings. We’ve got a symbiotic relationship with the mortgage industry. The more we promote high-quality operators, the less oxygen the sketchy ones will get.

Work with a trusted real estate agent who has knowledgeable leaders.

Berkshire Hathaway HomeServices has a global presence with knowledge of the local marketplace and we only use trusted lenders who have proven track records. So give me a call with any questions  you may have..