Mortgage Brokers Lying - Almost everyone has heard a horror story about a mortgage broker who has ripped off a client. Unethical behavior like changing a interest rate at close, changing loan terms and changing loan fees can and do happen but not that often. The mortgage policies put in place by many lenders and state laws help reduce any kind of unethical behavior in mortgage brokers and bankers.

Lying and deceiving happen not only by mortgage brokers, but by mortgage bankers, mortgage lenders, auto loan lenders, insurance agents, and pretty much every other industry out there as well. With mortgages being a much larger investment however, this is why you mainly hear about the mortgage guy or the mortgage company that ripped someone off. Deception and lying is not nearly as widespread as the news reports make it out to be, but since there is so much money involved during each mortgage transaction this is why the press likes to have a "field day" with mortgage related news. Therefore, anytime you are dealing with anyone regarding your finances, whether it is a mortgage broker, a mortgage lender, an insurance agent, a financial planner, etc... you should always use caution, pay attention to the details, ask questions and consider going elsewhere is you feel uncomfortable with whom you are working with.

Many unscupulous lenders and brokers offer mortgage rates that don't exist. The more attractive the quote, the more likely it is they are lying....meaning that the lender or broker has no intention of honoring it.

Mortgage Brokers lying has become a growing problem for borrowers, particularly those in hotly contested states such as California, Nevada, Arizona, Florida and New York.

Are you working with a shady lender/broker? - In general, 90% of mortgage professionals are honest, hard working, and do have your best interests in mind. Due to the overwhelming growth in our industry over the past several years there are bad apples that have slowly trickled into our industry.

Tighter regulation in our industry will continue to help curb the problem, but in the meantime you can watch out for the following hints and practices of shady mortgage lenders and brokers:

Any reputable lender should be willing to give you any of the numbers they quote in writing. Actually, by law they are supposed to give you a copy of a Good Faith Estimate, and Truth In Lending Disclosure within three days of your application. Failure or unwillingness to do so may be a red flag.

Another scam pulled by some mortgage companies is to force you to purchase credit life and disability insurance. This type of insurance pays off the debt if you die or become disabled.

This type of insurance is strictly optional. Purchasing this type of insurance will not affect your loan approval. Purchasing this type of insurance can add considerable costs to your loan.

If you are being asked to pay several points, but you aren't getting a lower interest rate in return, you could be working with a shady mortgage broker.

For example, you are paying 5 points, you have decent credit, but you are still paying an interest rate that is above the market average.

One common tactic of the shady lender/broker is to ask to see the Good Faith Estimate of any other lender or broker you are working with, then tell you that he can get you a better rate and/or lower fees. Everything is great until one or two days before closing. Then "something happens." You are told your credit score dropped, or the lender changed guidelines, or rates went up before they were locked. Now, your rate and fees are as high or even higher than with the original lender or broker and you don't have time to switch back.

If you have some questions or problems with your mortgage loan after closing on a refinance loan and your mortgage lender or mortgage broker does not return your phone calls while you are still in your 3 day period of rescission, you may be working with a shady or unscrupulous mortgage broker/lender. This is a tactic that has been reported by consumers after they have closed on their mortgage loan and they are unable to contact their loan officer to ask questions, request further information about their new mortgage loan, or to rescind on their mortgage loan. Take note that you can rescind your mortgage transaction if you are not comfortable with the mortgage loan or you do not trust the loan officer that set up the loan by contacting the title company or attorney that handled the closing of your mortgage loan and by placing your rescission request in writing. I would recommend notifying the actual lender, the loan officer's office, and the title company to insure your loan is cancelled in time, if that is what you feel is necessary because you are not getting anywhere with trying to contact your mortgage broker/lender.

Another simple way to see if you're dealing with a shady lender/broker is to check their record with the Better Business Bureau. If you see a pattern of multiple complaints, and specifically unresolved complaints, you may want to look elsewhere.

How to find a reputable mortgage broker - If you are looking for a mortgage and need the services of a reputable mortgage broker there are many ways to find one. You can do an internet search for a mortgage broker in your city. You can also look in the phone book under mortgages.

A reputable mortgage broker will explain all loan terms and costs to a borrower. They will charge reasonable fees for the sevice they provide. Borrowers should ask friends for referrals and shop around before committing to a broker.

An Internet search for mortgage brokers in your area may also yield good results. Most professional mortgage brokers will have a website and spend some time optimizing it for the Internet.

It is a good idea to check with any applicable Mortgage Professional Associations, when looking for a reputable mortgage broker. For example Mortgage Bankers Association(MBA), the National Association of Mortgage Brokers(NAMB), and in California, the California Association of Mortgage Brokers(CAMB) - And many others located Nation wide.

In most states, mortgage brokers are licensed by the state government. Always make sure that your mortgage broker has a current, valid and proper license. In addition, in many states it is easy to check if the broker has had any violations recorded against his license.

Ask the broker for references. If a broker cannot or will not give you references then its time to continue the search.

You may also have your realtor or any friends or family members refer you to a mortgage broker they have used in the past.

Reputable mortgage brokers charge rates and fees that do not vary based on age, gender, race, religion, or national origin. If you feel you have been discriminated against contact your state licensing authority to file a complaint.

Make sure when searching for a broker that you first find a good, knowledgeable broker that makes you feel at ease, has knowledge of the programs available, and is someone that you can work with. Once you find this then it is time to talk rates and fees but make sure and find a good broker first.

Interview your broker. If you have had credit problems in the past or have other issues that may prevent you from qualifying for the best rate, ask if your broker has experience working with clients in your situation. If so, ask how they handled similar situations to yours in the past.

The best way to find a reputable mortgage broker is through a referral. If a friend or family member has had a good experience than most likely you will as well.

A reputable mortgage broker will never make a lowball offer on your rate or fees. If it sounds too good to be true, it probably is.

If you are going to shop around be sure that you ask the same questions of each broker. Make sure that the broker knows what mortgage interest rates are based on, what the next economic report is that could cause interest rates to move (either up or down), when the "Fed" changes interest rates how this affects mortgage rates, AND if the broker has real time access to interest rates? Each of these four questions will have a profound impact on what your rate is and what it will be!

The majority of mortgage brokers are regulated to ensure a level of protection for the consumer. The extent of the regulation depends on the jurisdiction.

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