Released: January 01, 2007

Mortgage ‘tricks’ and shady brokers

Source: Amy Hoak, MarketWatch (Free Registration)

Brian Diez, a former military man, entered the mortgage business after a career as a stockbroker, figuring the field would offer him an altruistic benefit - helping families buy their first homes. He learned quickly, however, that not every one of his fellow brokers had their clients’ best interests at heart.

“What became clear to me is every company was really interested in selling as many loans as they can, and not really helping clients,” said Diez, sales manager for First Class Equities in Oceanside, N.Y. His quest to inform consumers recently prompted him to create a blog on the topic. See blog.

The “dirty tricks” he has seen and heard of range from brokers steering clients into products clearly unsuited for them to shady switcheroos at the closing table.
Consumers can protect themselves by doing some research online before talking to a broker or banker, in order to have an idea of their mortgage options before they’re ever presented, Diez said. They should also request copies of and review their credit reports to know what their credit looks like before the discussion begins.

You may never find that altruistic mortgage lender: It’s rare when commission-earning individuals - whether the product is a mortgage, stocks or an automobile - can completely divorce their self interests from a sale, said Joseph Badal, senior executive vice president at Santa Fe, N.M.-based Thornburg Mortgage.
But there are ways you can shop more wisely for a mortgage so as not to get fooled by sales people who are more concerned about commissions than clients:

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