Lies Banks Tell (And a Bird Update)
The Health Department called. The birds outside our office died from ant poison that had been sprinkled on the grass. Funeral service details will be announced later this week.
Now then, listen up…
It’s not uncommon for folks to call our office and ask us to look over a quote they’ve received from a Poopy Big Box Bank or a Janky Pinstriped Suit Lender (well, they don’t ask me, but you know what I mean). Basically, the borrower wants to know if we can beat the other guys’ prices. But here’s an interesting twist. Guess how many times those other quotes have bold face lies splashed across them? Boo coos of times, I tell you, boo coos.
Last week one of Hottest Mortgage Banker in Texas Hayley’s borrowers called her because she’d gotten a quote from a Poopy Big Box Bank. This other quote was in the form of an Excel spreadsheet (fancy, huh?), and contained a fabulously low interest rate, some blatant miscalculations, and a few bold faced lies.
Here’s how that bank lied through their crooked teeth. The borrower, a nice lady looking to buy her first home, planned to put less than 20% down on her house (totally a normal thing to do). Now in this borrower’s case, she absolutely had to obtain mortgage insurance (MI). Anytime any of us gets a loan and we put down less than 20% (unless we’re doing a 2nd loan, which this lady was not), MI is mandatory. But you know what that janky lender left off the quote? The monthly mortgage insurance fee, which amounts to probably over a hundred dollars a month for this lady. It’s not that she wasn’t going to have to pay it, rather the lender didn’t include it on the quote in efforts to make it look like the borrower’s total monthly payment would be way low.
Then the lender included lots of pretty blank spots for title fees and the escrow account, making that monthly payment look lower by the minute.
I asked Hayley about it. She said,
“Their quote looked great since they didn’t list title fees, an escrow account or mortgage insurance. But when I quote someone I am going to list every single fee the borrower is going to have to pay, and I’m going to overestimate some of the ones that we haven’t nailed down yet, because I’d rather have the conversation of ‘Looks like you don’t have to bring as much money to closing as we thought’ than telling someone they actually need twenty thousand dollars more to buy this house.”
[Note: when I say “fees” I’m talking about third-party fees that you’ll have to pay on any loan – fees that the title company or mortgage insurance company are charging, not Envoy.]
I’d planned on pasting the quote here on the blog so you could all see the atrocities, but honestly, I didn’t understand the thing. And that leads me to my lesson. Y’all, I’ve worked in this industry a total of six years now (if I include the mortgage banker I worked for in college who had me pick up her vicious poodle from the groomers once a month), and I honestly still don’t know how to intelligently read quotes. I will openly admit that most of my readers are way smarter than me, but it’s still possible that the average person cannot fully dissect some of these wack lenders’ quotes. And that’s why you need to either a) just get a quote from someone reputable in the first place (like these people) or b) take the janky quote to someone reputable (same people as above), and ask them to go over it with you.
Okay, sorry for the rant today. I just care about y’all (really, I do) and I hate to see folks getting tricked.
Now, off to collect shoe boxes to bury all those dead birds.
i like all of your posts, but this one is great for a first-time homebuyer! we are in the process of buying (started wayyy before I found your blog, of course!) and it’s all pretty mind boggling for a first timer. maybe you could do a post explaining allll the things we have to pay for and don’t understand why! and sorry about the birds.
I know what you mean. A lot of the fees are from what other people do – like title insurance and mortgage insurance and appraisals. I hope that your lender will explain it all before you close. Either way – yes, that’s a great idea for a post! Thanks for reading! And I will send your condolences to the birds.
Another great article by the “lowly assistant.” And I hope when I grow up, I know HALF as much as you about mortgages . . . THANKS FOR THE INSIGHTS AND THE LAUGHS!!
Oh, and my condolences for the birds . . .
Thanks Christina! Girl, I’ve tricked you good if you think I know a toot about mortgages 🙂 dead birds on the other hand …