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Mortgage fraud through bait and switch

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Sam Site Admin Joined: 21 May 2005 Posts: 816 Location: CALIFORNIA 349.25 Dollars($)	Posted: Fri Apr 02, 2004 5:00 pm    Post subject: Mortgage fraud through bait and switch Like 0 Dislike 0 Bait and switch is a kind of fraud in which the mortgage lender lures consumers by advertising loans at a low interest rate so that customers can submit their applications for the low rate mortgage. Afterwards, the lender reveals that the particular loan offer is not available and he offers a substitute loan program that has comparatively higher rate. Most lenders intend to convince consumers to accept the substitute loan program so that they can avoid the disappointment of not getting the bait, or as a way to recover the sunk costs that the consumer has spent to obtain the bait. However, the best way to avoid such situation is to check whether the lender provides the rate in writing at the time of loan application. For example: Suppose your lender has quoted a 5% interest rate when you applied for a mortgage. But when your loan is processed, he informs you that the current interest rate applied on your mortgage will be higher than the advertised rate, say for instance, 8%. This is known as bait and switch. Bait and switch is committed by mortgage lenders and other creditors as well as sellers to lure customers for lower interest rates and prices. Later on, these customers have to purchase substitute goods as the advertised good is not offered by the seller. Lenders and sellers often use advertising practices like the use of loss leaders or the use of sales techniques to keep customers away from low-profit loan programs or low-profit goods. These practices do not come under the bait and switch mechanism as long as it is possible to accept the loan package or purchase the original item.
Jessica Watson Guest	Posted: Mon Feb 08, 2010 10:17 am    Post subject: Bait and Switch Like 0 Dislike 0 Please see if you can help me. Is it against the law for a morgage company to do this tack? How as a home owner can you get help if you know that you have been a victom of this? I am in desperate need of some answers Thank you Jessica
BiBi Guest	Posted: Tue Feb 09, 2010 6:23 am    Post subject: Like 0 Dislike 0 Listen, few lenders are pulling that old Bait and Switch thing these days. It's the Lead Sales companies posting internet ads and other ads offering low rates who are only trying to capture a borrower's info so they can then sell that lead for up to $50.00 per lead and MULTIPLE TIME on top of that! They are not regulated to any substantial extent so they can say, "Are you paying over 3.5%?" Click on right here and get 4 quotes within an hour! No Lender or Broker in their right mind is doing bait and switch these days. So if it looks to good to be true, don't be an I DIOT and chase after the bait!
Darleen Guest	Posted: Sat Dec 11, 2010 8:57 am    Post subject: Bait and Switch Like 0 Dislike 0 Hello, I disagree that no lender is doing this. We had this experience. In addition they told us we had a FHA mortgage even had an inspection for FHA done. When we went to ask for modification we found out FHA had no record of us.
Mortgageconsultant5 Guest	Posted: Sat Dec 17, 2011 2:28 pm    Post subject: Locked rate as answer to bait and switch... Like 0 Dislike 0 It is very difficult to prove bait and switch in the lending industry because of whether someone's rate and pricing (not the rate for 5x the pricing you wanted!) may not be officially locked in. You will have a good faith est. with maybe $3500 total closing costs, 30 yr fixed and rate of 3.625%...but it is only the cost they can not change...they can always increase the rate until you have it officially locked in. MAKING CERTAIN your loan rate is locked maybe the only way to avoid becoming a victim of bait and switch. If it is a rate and price better than everyone else by one eighth to one half in rate and it looks good to you...demand a receipt of your lock to match the costs on the good faith estimate you receive the same time as the lock. When they lock...they will have proof of a locked rate to provide you. So make sure if it seems too good to be true and you already decided not to go with your competitive choice or choices who gave you their best deal...get a fresh good faith estimate. If you like the costs and rate get it locked right away. If they say they can not lock it, then go some where else! Remember, rate and price are not everything. Honesty and having someone you know can give you a relatively smooth pain free loan process are still important! They may not lock your rate until you sign loan disclosures including a good faith estimate. You can tell them you will sign them but want a receipt of that lock immediately (they can lock it right away) upon faxing them your signed disclosures. Please remember, if you trust a particular loan officer but they do not match up with a couple of good legitimate quotes, let them know. Sometimes they can go back to their bank Manager and get a deep discount to match a legitimate competitor's offer. Sometimes on banks bottom line is not as good as anothers on a given day but both bank's may gladly give up money to save a loan! _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant

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