This post is a follow up to one that I recently wrote entitle Craigslist Mortgage Ad's *Beware*. In that post I went over the laws about advertising in Florida and what the state requires. On Craigslist I have seen and continue to see gross violations of these Laws. It is a shame to see this because I do advertise on this site and really believe it is a wonderful marketing tool. However, when people abuse the system it hurts everyone not just them.
In my previous post I went over step by step what should be posted in these ad's if rates are being advertised. So I will not repeat myself please refer back to my original post.
Below is some of what I have seen and would give you warnings on.
Postings that display rates that show 1%,2% or even 3% or any fraction in between please note these are NEGATIVE AMORTIZATION LOANS (NEG AM). Now as many of my readers know I do believe in some cases these are fantastic financial tools when used with an educated consumer and only in some financial situations.
The problem with these ad's on Craigslist is these people claim these are interest rates when in fact they are nothing more than the payment rate on the loan. The real rate on these loans can vary from upper 6% to 8% depending on the margin and with these type of misleading ad's I can only assume your rate would be in the highest level they can charge you. This is a huge difference to you the consumer.
Remember if you see these type of misleading advertisements on Craigslist take my advice and just go right on by. If they really claim outrageous claims you can always click on the Prohibited link and the ad will be flagged by Craigslist and removed.
My advice is always go with your gut if it sounds to good to be true it probably is.
For More Common Sense Mortgage Advice: Mortgage Advice in South Florida
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Full-Time Mortgage Broker in South FL. Palm Beach County. Specializing in Hard Money / Private Money, Foreign Nationals, Jumbo and Super Jumbo Loans. In addition I work with Today's Premiere Lenders.
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Matt,
I read your first Post as well! Interesting how they are so off. Good deal, now people just have to read it.
Tom Weiss
Matt-- nice advice...
Matthew- Great post about proper disclosures. There are so many people doing this and all we can do is to keep on educating the consumers in positive ways just as you are doing! Katerina
Tom, Thank you I really appreciate that
Colleen, I am truly honored for that compliment
Katerina, Thank you. I agree we can do is educate the consumer
This is where Loan Officers and Mortgage Brokers can also differentiate themselves
LOs don't have the same regulations - although their banks do
should they get in trouble they just lose their jobs
If MBs lie on ads like this, we have compliance issues that make us save all our ads for 2 yrs.... and if we lie, then we don't pass go - straight to jail!
David, Very true.. and I have to tell you I don't look good in orange and chrome..lol
I can not believe anyone would even mention the word negative arm right now - man we really need to get these borrowers educated.
Wow yea that negative arm took me back a step too. Orange and chrome LOL.
Thesa, I don't think that a neg am loan is bad but in the wrong hands in can be deadly. This is a perfect case of the wrong person advertising this product
Keith & Robin, Glad you liked the orange and chrome..:-)
Matt.... the gut..... does it help if it's really big like mine? lol Well, those in the mortgage business know that if it sounds or looks to good that it is... but to the general public, they just believe those that promise and make guarantees.... people will hear what they want to hear unfortunately. EDUCATION is so key...
Jeff, I agree education is the key.. Thanks for you comment
Matt,
Nice post! Good sound advice to those who are not aware.
Dave
Dave, Thank you. I just hope people will read it.