Website design By BotEap.comWe’ve all heard of the old bait and change in the auto industry, but did you know that it is prevalent in the mortgage industry? It is so common that you used to hear it from potential clients quite often. Is that how it works.

Website design By BotEap.comYou pick up the phone and call a lender; We will call the lender Avox for the purposes of this article. An Avox loan officer, Mr. Bill answers the phone. The first thing most people want to know is the interest rate they can get. Mr. Bill knows where interest rates are located and is also quite familiar with the rates of his competitors. He proceeds to give him a rate that is well below any of his competitors, and even below any rate he could meet, and he knows it. He also knows that he will not have to give you this fee either; In fact, you will take whatever he wants to give you.

Website design By BotEap.comBy now you’re probably thinking, no way. Throughout the entire loan process, Mr. Bill sticks to the promised rate and knows he’s gotten hooked because even if you’re looking, you won’t find a lower rate; He has promised you something far below the best. If you are paying off debt, he will encourage you to stop paying those bills because you are paying them. He will encourage you to get cash; in case of emergency. You know that many people in this position will begin to think of all the wonderful things they can buy with that cash they get when the loan closes. It may even suggest that you skip your next mortgage payment; after all, you are paying for it. In this position, most people will follow your advice. If you don’t, that’s fine too because very soon he’ll have you on a keg.

Website design By BotEap.comOne day, three weeks or more into the loan process, after you’ve already set a date to sign papers, he will inform you of a problem. Due to unforeseen circumstances, no matter what, it can no longer give you the promised rate. Instead of that wonderful three percent fixed in thirty years, he can only give you a four and a quarter in the thirty fixed years. Now there are three days left to sign in and you have a problem. If you are like many borrowers, especially those without senior debt, you may have defaulted on your credit cards thinking they will pay them off. If you don’t cancel now, late payments may show up on your credit report. Most people will also not make their next mortgage payment, which can result in a thirty-day delay on their mortgage. If you were searching before deciding on Avox Company and Mr. Bill, you may have been left out of the thirty day window and if you go to another company and they take your credit away you may take another hit.

Website design By BotEap.comYou now have two options. You could go to another company and check your credit, which now reflects a lower score due to a mortgage delay, credit card delays, and a hit from withdrawing your credit again. Perhaps now because the mortgage is behind you cannot qualify for the premium. There is a good chance that you will have to settle for a much lower rate now than you would have received if you had gone to an honest lender in the first place. Maybe you’ve even pledged some of that money you were getting with your cash refinance, and now you’re in real trouble. What choice do you have? Starting over and resetting the thirty days to close the clock again is probably not an option now. This whole scenario may surprise you, but you used to constantly hear it from potential clients. I cannot stress this enough; it is a common practice. Most people in these circumstances keep the loan anyway, anxious to close and get the money.

Website design By BotEap.comJust remember, if it sounds too good to be true, it is too good to be true. Trust your instincts when talking to a new broker. If he’s making a bait and he attacks you, you might not know it until it’s too late. If you are paying off debt, make those monthly payments. If a mortgage payment is due in the middle of the process, pay. It will be repaid within thirty days of the loan closing. At least if you fall prey to the bait and switch, you’ll find it easier to get away from a corrupt runner. Good luck and happy loan.