Mortgages today
It was bound to happen, my favorite source for financial news has introduced a new daily column. Marketwatch is now offering a daily roundup of subprime and credit-crunch news. Click here for today's stories.
Speaking of bound to happen, I'm surprised it took this long. I've been commenting about the misleading mortgage ads on the Internet for a while now, you know, the ones that tell you that you can get a $500,000 loan for only about $700 per month. Well, the Federal Trade Commission finally got an Internet connection and just noticed the same thing and they are going to do something about it.
This one was worth 3 smileys.
The FTC finally noticed that "Many mortgage advertisers are making potentially deceptive claims about incredibly low rates and payments, without telling consumers the whole story -- for example, that these low rates and payments apply for a short period only and can go up substantially after the loan's introductory period,"
Click here to read the story at Marketwatch or
click here to read the story from AP courtesy of Yahoo!
2 interesting tidbits that amazed me. Lending Tree, a division of Barry Diller's Interactive Corp. and one of the largest online mortgage advertisers did not receive a letter from the FTC even though the fine print with the usual disclaimers is several clicks away. Even more amazing, Lower My Bills which is one of the biggest offenders I have noticed turns out to be a division of Experian, one of the 3 credit bureaus. WOW!
Finally, the government is also considering getting into the act and of course this one's a doozy. With the blame game going as fast as possible and finger pointing seemingly a new popular sport, borrowers who can't pay their mortgage are now saying that they were never told anything like this could happen. Some borrowers are claiming that they never knew their rates would go up when they took out an adjustable rate mortgage. The word adjustable is not even in fine print and what does the word adjustable mean to you.
They were told. Now that doesn't necessarily mean that there was no mortgage fraud and no predatory lending because there most certainly was. Except that it likely was a small portion of the mortgage market, not every loan that isn't getting paid today.
Congress is now considering whether banks that package mortgage securities and the institutional investors who buy them could be held legally responsible for mortgage fraud committed by lenders. I can't imagine where anyone could get a loan if this one goes through but stranger things have occurred. Click here to read the story from AP, once again courtesy of Yahoo!
Let's close with some good advice. Do not borrow money from an online advertisement.
Every good real estate agent knows something about mortgages and knows several very good lenders who will explain everything to you so that you are comfortable and understand what you are signing.
It's your money, it's your credit, it's your future. Protect it.