Blowing the Whistle on Predatory Lending Advertisement

I have been pondering on this idea for awhile. One of the reasons that push me into putting this idea into action was the fact that we might see a short refinancing boom in 2008 due to the conforming loan limits being raised when the President Bush signs it in the middle of February.

Ever since I became involved in real estate years ago I began to realize how many unscrupulous people in the real estate and lending industry could easily misguide, victimize minorities, specially the Latino community, and average Joe.

Although the real estate industry is not the only one dealing with unscrupulous people looking to make a quick buck, I write about it because this is the industry I work in.

Obviously, everyone is presumably innocent until proven guilty; therefore I won’t be doing any type of new accusations.

With that said, this will be the first of many posts to come that will show you some potentially predatory advertisements.

When ever you see the picture of this referee:

I will have a new potentially predatory advertisement displayed on a post. You can also click on the link titled “Predatory / Subprime Advertisement” under the section titled CATEGORIES on the right hand side of this page to see a collection of these ads.

If you are a consumer looking to refinance or buy a home, steer away from this type of advertisements. If you work in our industry, educate your clients about this type of advertisements.

I ask you to participate by submitting what you think are potentially “predatory lending or real estate ads” and I will post it here. Names, phone numbers, license numbers and any other descriptive information will be edited in order to protect the (not so) innocent.

Credit will be given where it is due unless you want to be an anonymous participant.

Finally, we do have real estate and mortgage practitioners who believe in transparency. Case in point Jeff Corbett from TheXBroker.com who published these two very interesting posts: “Potential Mortgage Malpractice” and “What is Mortgage Fraud?“

Comments

3 Responses to “Blowing the Whistle on Predatory Lending Advertisement”

mike montuvio on January 28th, 2008 12:08 PM

I agree with you. my uncle almost fell for one of those 4 Option Arm loans because he saw an add on a magazine for 2% interest rate. my uncle called the guy and he guaranteed he would save hundreds of dollars but fail to explain how he was getting more in debt with the bank at the same time. lukily we told him it was a bad idea. Great post
Lee Matthews -- Financial Concepts West on January 30th, 2008 9:09 AM

“One of the reasons that push me into putting this idea into action was the fact that we might see a short refinancing boom in 2008 due to the conforming loan limits being raised when the President Bush signs off on it in the middle of February.”

People refinance far too often. The front-end interest load on a mortgage amortization schedule means that a homeowner is “shooting themselves in the foot” when they do this.

A far better idea would be for the homeowner to obtain a Home Equity Line of Credit (HELOC) and use it as an interest cancellation account to accelerate home equity.

A home is not an asset until it has been paid off “free and clear” — until then it is a liability.

Today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.

And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit to ‘power’ the Money Merge Account™ financial solutions program.

A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)

And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.

It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.

I’d be happy to provide further details…
Ney on January 30th, 2008 2:17 PM

Lee,
It is true that there are several ways homeowners can reduce their mortgage debt significantly.
Take Financial Freedom International for example. They have a program, software, product or loan (what ever you want to call it) similar to the one your company offers which supposedly helps homeowners pay down their mortgage debt as fast as around 12 years or so. They claim it works better than the MMA program

When you sit down to analyze the way these programs (allow me to call them “programs”) work, they could be an advantage to a homeowner but I am not 100 percent sold on the idea that this works for an average family. I have asked several times a representative from FFI to send me a descriptive article of how their program works but because they don’t want the competition to know how it exactly works they have not provided me with that information. Also, I have asked them to give me information about past clients that have used their products but I have yet to receive a good confirmable testimonial about a homeowner that used their program and made it work.

I know by looking at the numbers, it could work but I don’t think this is a product for average Joe homeowner and that is who your company, FFI and all these other companies mainly target. But if the representative from FFI and yourself would like to prove otherwise, you are more than welcome.

I have prepared an article specifically about this topic because I get numerous emails asking me what I think about them and how they work and I have given the representative from FFI an opportunity to come forward and present the program himself but I have not been able to accomplish that from him yet.

Lee, if you are also interested in providing information about how your MMA program works and provide me with confirmable testimonials, a detailed example of how it saves money, I will put it on my future post. Obviously the personal information of your clients won’t be published.