bait and switch

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TEdwards

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Post Posted: Fri Jan 05, 2007 2:43 pm    Post subject: bait and switch
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can you provide some details of mortgage bait and switch
Melanie Mitchell

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Post Posted: Fri Jan 05, 2007 2:58 pm    Post subject:
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Hi Edwards,

In a bait and switch fraud, oftentimes consumers are advertised about loans with lower interest rates to get them apply for the loan. Before finalization of the loan the lending institution informs the prospective borrower that the loan offer to which he had agreed is currently unavailable and another substitute is available having higher rate.

One possible way to avoid such situation is to ask the lender to provide the rate and term details in writing when he applies for the loan.
la

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Post Posted: Fri Jan 05, 2007 3:26 pm    Post subject:
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As per TILA, GFE should disclose the APR, payment schedule, relevant finance charges and other details. But this requirement only applies to purchase money mortgages.

Many such fraud practices continue because TILA does not cover refinance loans. And lenders take advantage of that.

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adonis




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Post Posted: Sat Jan 06, 2007 1:53 am    Post subject:
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That's a trick often lenders play with borrowers - signing them for low rates and then disclosing the actual picture by suddenly revealing that the low interest loan isn't available, so better try out a new one!
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