This post is a follow up to my first two postings Craigslist Mortgage Ad's *Beware* and Craigslist Mortgage Ad's *Beware* Part II. In those first two postings I have outlined in detail what the laws are in Florida on advertising Mortgage's. Florida is very specific on their laws and have outlined in a ver simple format. If you have any questions please refer back to the first two postings.
In this the final post of this series I will post one of these blantant ad's that are on Craigslist and also show you what you can do to stop them from posting them.
Below is the Ad I continue to see in some form:
Title: 5 Year Mortgage at 2.75% with NO Fee's
Refinance Today!!!
2.75% fixed for 5 years. A $250K Loan for $1000 per month.
This is not an adjustable option Amortization or Negative Amortization.
NO FEES...
We pay for the APPRAISAL...
No Broker Points...
We even pay for Title and Escrow in most cases....
These fees alone add up to $10K - 15$K on an average. We're SAVING you tons of money with this offer.
You can get CASH OUT pay your High interest Credit Cards off or just Refinance and save money.
The time is now!!! RATES went down, but the market has not recovered yet.....
Now lets take a closer look at this ad and break it down for my readers.
MTA Index (this product is tied to) 4.79
Margin (this is added to the index)3.25
For a Final Rate of 8.04% fixed for five years.
*Note the margin is decided by the broker and in this case I used a higher margin because in the advertising they claim they are paying all closing cost and please keep in mind they are entitled to a profit.
If we use this margin the commission earned would be on a $250,000 loan would be slightly over $9,000 but lets remember they claim they will pay all your closing costs. On average in Florida the closing costs without points or fee's are 2% of the Loan Amount. In the example I am using the 2% would be $5,000 (real money) which would leave a net $4,000 which is an average commission for this type of loan. In addition please note that is NOT what the Loan Officer will earn. They will receive a percentage of that as a commission.
The sad part of this is the product is not a bad product when used in some cases and for a select few people who understand the loan and know how to use it. (Also not with that margin)
What You Can Do to Stop Them
On Craigslist when you open an advertisement in the upper right hand corner you have links that you click on for the specific ad you are reading.
please flag with care:
miscategorized
prohibited
spam/overpost
best of craigslist
If you see Ad's that are blatant misleading you can click on the appropriate link and it will be removed from Craigslist.
In the Mortgage Industry we have good and bad just like any industry that exists today. However, we have to remember our products that we use can either help the person or make them loose their home. I know I can look at myself in the mirror every morning and know I do the right thing by my clients.
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Matt,
It's Sad, and Yet Funny, how they list these false ads.. Idiots.
Tom Weiss
Tom, I just feel bad for the people that believe it. The programs are not bad but they are not for everyone and are only for a select few people
Matt...this is a good reminder for me to update my listings on Craigslist. BUT...I have seen some "bad stuff" that is around just like what you're talking about. I guess rules are for those who will follow them! Nice, huh?
Matt I mean.... could be Tom or Ttom backwards.... Ttam?
Anyhoo.... great educational break down. As you stated, this is not a bad program if used correctly and or if explained correctly. Overall, the higher the loan amount, the easier for them to pay for all of your closing costs, title, etc etc.... But that ad that you provided.... so false in their statements. This ad needs to be brought to the attention of the state of Florida's mortgage bankers association. And we need to keep posting stuff like this for the consumer.
Besides, this add is so illegal in another way. It doesn't show the APR.... does it show the lenders name and phone number?
Matthew - Thanks for explaining this Craig's list ad. It's amazing what people will fall for. By the way I've been writing a series of posts on Mortgage Fraud and have a question. If someone wanted to report a Florida Mortgage Broker for suspected fraud, who would one contact? (I'll check back here for your answer.)
Susie, True very true but now you know you can click on the prohibit and it will be removed from Craigslist
Jeff, I think you meant me..(Matt) but ok..:-) Exactly correct as I have stated in my previous posts about Florida law.
Dan, Here is the link you can go to Office of Financial Regulation and on this link you will find a link to file a complaint. I have seen and commented on your posts. They are loaded with good info
Matt, I am wondering how they can post it and get away with it without someone reporting them. They are missing alot of info that should be included in the ad.
What's your name? lol Yes, Matt.... good job...
Keith & Robin, You can post anything on Craigslist. Legal or not... However it is up to us to help them by clicking on the prohibit link and letting them know this is not a legal post.
Jeff,Oops..lol Thank you.. I knew what you meant
Its ds like these that lead to the statistic that 66% of Americans think Mortgage Advertising lacks credibility! Good post!
Matt,
Great post. I never thought about flagging those guys. That kind of misinformation makes our jobs that much harder. The average consumer has no idea how neg am loans really work. Guess what I'm doing next LOL
Rey, You are so right.. That is why we need to help stamp this stuff out
Cheryl, Go For It Cheryl! :-)
Excellent breakdown Matt, I hope as many folks as possible read this and take heed! Wish that ratings system was back, I'd give you a 5!!
So many people would fall for this. So many homeowners in trouble right now, and something like that may look good to them.
Jason, Thank you ... a 5?
Stella, I am afraid you are right.. Thats why when we see these type ads we must stamp it out or educate the consumer. Thank you for your comment
Yup, a 5....that and a feature. But hey, that's just me.
Jason, You are very kind. Thank you
Matt,
I guess there are all sorts out there.
Neal, True very True...
I'm really beginning to think all the false and self centered advertising on Craiglist is not the place my clients go to look for a great agent or LO...what do you think?
Sally, I advertise on Craigslist. I think is a great place but at the same time their are alot of bad people on craigslist. You just have to have the ability to see the tree's from the forest
Matthew- Yep,flag those ads! Craigslist does not like bad ads either! Katerina
Katerina, I agree with you we have to all help. I truly believe Craigslist does not want illegal ones either.
As usual - great post Matt...... do you ever wonder how much money these crooks are making? Doesn't it just kill ya?
Lewis, I know.. The only thing that makes me feel good is that I know I can sleep at night..:-)
"This is not an adjustable option Amortization or Negative Amortization."
That is a very sketchy and untrue statement. I have posted many print and online ads for Neg-am loans, emphasizing the low payment option in my time but would never even consider writing something so illegal!
Anthony, Exactly.. I have advertised those loans in the past but always must have full disclosure.. APR, negative amortizion, etc....