Stupid Lending Tricks, Episode 12

by Alex Stenback on December 11, 2006

So, we just wanted to poke our heads out with this short PSA:  Do not
let sketchball mortgage brokers bully you into paying fees for a bunch of stuff they made up.

Just what are we talking about?  The other day, we got an email from a tipster relating a tale (with supporting documents, see image after the jump, click for big) in which a lender tried to collect just north of $3,300 in fees for a bunch of made up, misspelled, bogus fees when all the client did was apply for a loan (they ultimately are closing with another lender.)

Read the tipsters email, and see the actual invoice on the other side of the link below -  These are exactly the people that have no business in lending or real
estate, and a great example of what you can get when you meet your
mortgage lender in a bar, or the county workhouse.

[Bad experience with a shady lender or real estate agent?  Send us a tip.]

Speaking of bad lender behavior, I thought you might
find this [attached] interesting/amusing. A friend of a very worried
friend gave me this "invoice," wondering if the lender had any basis to
collect these fees.  After a little digging, it tuns out that all the
friend had done was meet with the lender, and signed a loan application
(they are closing with another lender, for obvious reasons)  The bill
for all of this: $3300! 

But wait, it gets better:  the lender also asked that the check be
made out to him personally, (rather than his company,) and that if
[redacted] does not pay within 30 days, they’ll file a judgement with
the county.

This is just unbelievable stuff – We also liked the part where the lender
itemized the fees, calling one a "counciltation" (not a typo) fee and
the "re-structure purchasie price fee" – really, he wants $1590.00 for
re-structuring the purchase price.   We don’t even know what that means. 

In the lenders defense, we did note
that they left out the "taking my calculator out of the drawer fee",
"answered my phone fee," and "I was really sleepy one day when you
called fee" but why split hairs?

In all seriousness, this lender is hoping the fear of a judgement, which they
have no basis for filing, will compel the borrower to submit to these
bogus charges and pay up.  Which we have advised this person to never,
ever do. 

Invoice_markup_1

Note: Due to harrassing nonsense emails, we’ve radacted any information that may have been used to identify the offending lender or LO.  We’ve saved all the comments and are definitely going to run them as a hate mail article later next week, so stay tuned, they are hilarious in their stupidity.  We’ve also logged all of the commenters ISP’s so that we know where and when the comments were made.  Email us offline if you have any questions.

{ 10 comments }

matt December 11, 2006 at 5:45 pm

Maybe this is the guy’s website:
[redacted]

I grew up in the upper peninsula of Michigan. I didn’t know Minnesota had one. Do people here call the arrowhead a peninsula?

Editor December 12, 2006 at 8:22 am

Um, no. Last I checked, a peninsula has water on three sides.

I think what we are seeing here are the death spasms of a bad lender – the domain [contact us if you would like to know which lender this was, whose info we've redacted due to threatening emails, comments and voicemail] was non renewed Nov 19th.

Once these lenders start to circle the drain, they can get really dangerous as behavior flips from unethical to illegal.

Jennifer December 12, 2006 at 8:54 pm

[redacted] is that a real name?

Garrett Klein December 14, 2006 at 10:43 pm

Was this a lender or a broker? Let’s get it right…lenders are regulated to a much higher degreee than brokers so these items do not occur as frequently.

Editor December 15, 2006 at 11:00 am

We are using *lender in its most generic sense here, Garrett.

*For the uninitiated reader, there exists a subset mortgage industry people who are forever parsing the definition of mortgage broker, banker, lender, planner, etc. etc. etc. etc.

The whole thing is rather tedious, so we simply use the terms interchangeably.

Z December 21, 2006 at 11:18 am

[we are not going to start listing home addresses] ed.

Melissa December 21, 2006 at 5:34 pm

Great Blog! I have just started a mortgage/real estate blog myself with the goal of educating the average person on these subjects. Great entry, you have a very unique style. Keep up the good work.

Derrik Dyka December 22, 2006 at 10:12 am

What makes it impossible is clients (as a realtor) who are so sure of their lender being an honest person. We have all seen nasty practices in real estate, both lending and realtors, best advice, talk to someone that you not only trust, but that is trusted by others.

sandy colomb January 7, 2007 at 2:00 pm

I am a divorced woman (I am 63 years old but not retired) and have made a lot of financial mistakes lately. I am trying to pay off credit card debt, sell a boat and some gems I purchased for someone who then didn’t want them. I have refinanced my house through a broker (charges $7500 approx)to get out of the ARM I was on but the payments are very high now. I also refinanced my second mortgage. I thought there would be enough to pay credit card debt of $35,000 but they didn’t give me enough. My broker told me that once the loans went through I could ask for a higher credit line and I wouldn’t be refused. Well I was refused!
So now their suggestion is to refinance everything AGAIN one month later to get the missing $35,000 to pay off the cards. I would have to pay charges for the loans again of $4,500! This would also put me in debt at 100% of the house value. Houses are not selling very well so I don’t think I could get my value out if I had to sell. This has left me at the edge of bankruptcy.

Stephen Gross January 11, 2007 at 8:34 am

Isn’t this kind of behavior illegal in some way? Is there a BBB to which you can report this guy?

–Steve

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