(PRWEB) July 25, 2005
According to a just released report by the National Mortgage Complaint Center, homeowners wishing to finance or refinance their homes should consider steering clear of any mortgage service/mortgage referral service that promotes itself on TV or the Internet as a way to get mortgage firms to fight for their business, or as your helpful way to "get rid of debts or credit card bills".
According to the report, in the vast majotity of cases inspected, the lenders that would fight each other to give the homeowner "the best possible deal", were in many cases the very same lenders that have a reputation for gouging or over charging consumers nationwide (one lender that came up very often as a "competitive lender" is under investigation by numerous state attorney general's for gouging consumers). According to Thomas Martin, President of the National Mortgage Complaint Center, "this could be the biggest case of individual or massive fraud in US History, because the homeowner does not know who/what they are dealing with. In many to most cases studied, the Internet mortgage lender/ mortgage referral service appeared to be getting the most money out of the homeowner in fees, or in excessive interest rates". As a solution Martin suggested, "keep it local, deal with people you know, or deal with companies that have been around for a while".
Martin went onto say that his "biggest worry is mortgage firms promoting exotic interest only mortgage products that have starting interest rates as low as 1.5 percent to 2 percent", "or mortgage firms that charge excessive interest rates using the excuse that its better than paying for a huge credit card bill". "At some point reality will set in, and homeowners will realize that they received a mortgage interest rate that was much higher than what they deserved/could have received, the homeowner will realize that the mortgage lender's fees were excessive, and or the homeowner will be put in a position; no longer able to afford his/her mortgage payments". As a result Martin predicts a huge new wave of forclosures starting sometime early next year. While Martin claimed to have identified a few honest companies on the Internet/TV, he indicated that the majority should not be trusted with something as important as a home loan or the largest financial transaction in a typical persons life. At the same time Martin pointed out, "without federal laws that level the disclosure playing field between Mortgage Brokers & Mortgage Bankers regarding a kickback scheme called a yield spread premium", "the consumers have no chance of getting a fair or fully discosed deal". Currently banks and mortgage bankers are not required to disclose a kick back for increasing the borrowers interest rate, while mortgage brokers must disclose it. Martin attributes this un-even playing field to campaign "contributions" from banks & mortgage bankers to the US House & Senate Banking Committee Members along with the current and previous federal administrations.
Martin indicated; "most disturbing of all; the working class, the elderly and or minority groups are the most vulnerable to the Internet mortgage referal service or TV ads that say "we can help you", or "we can send you $10,000 right away to pay off your debts", or "we can get 25,000 banks to fight to the death over your mortgage". According to Martin it would be more correct for these lenders or mortgage referral services to say; "Call us so we can help ourselves to your home's equity, or call us so we or our friends can rob you blind". Martin also expressed a deep concern that these same types of companies force appraisers to come up with unrealistic valuations to qualify a medium, or low income borrower, for a home loan they cannot afford. Martin described this type of appraisal fraud as a "train wreck waiting to happen", and he indicates inflated appraisals are happening at historic levels nationwide.
If you think you have been a victim of being gouged in an TV/Internet mortgage transaction or by a mortgage referral service you should contact the National Mortgage Complaint Center for a thorough review of your documents. The National Mortgage Complaint Center web site is located at Http://NationalMortgageComplaintCenter.Com/.
If you have information as a current or former employee of a mortgage origination TV/Internet operation or a mortgage referral service that took advantage of consumers, or if you are an employee of an appraisal service that was forced to provide false valuations on bank or a mortgage lender's orders, you are also encouraged to contact the National Mortgage Complaint Center.