Buying a Home in Salt Lake City, UT

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Beware the Bailout Buzzwords

buzzwords: bailout obama stimulusBeware the Buzzwords.

I had a recent experience with my current mortgage holder that makes me wonder if consumers are accepting "deals" from banks that are not "deals" at all.

First, to be clear: I have equity in my home and I don't need a loan modification. I'm just in the market to refinance because rates are pretty good right now.

  • I called to get a payoff on my existing loan.
  • I got transferred to a loan retention department where they had a "special deal" for me if I stayed with them. I think it was something like 1/8 less than my current rate. AND I had to pay origination fee and other junk closing costs...
  • I told them that their retention rate was terrible. It was 7/8 higher than another option with no points or fees.
  • They told me I might qualify for a loan modification under Obama's plan.
  • I told them I likely wouldn't go for that even if I did qualify, but I would listen to their sales pitch just to see how low my special government "bailout" rate could be.
  • Turns out the Obama "special deal" was only 1/8 better than the lender's deal. Still about 3/4 higher than the rate I had locked in elsewhere with no points or fees. I even pointed that out and asked what was up with that? The rep just said that some people thought it was a good deal and that the program wasn't meant for everybody.

Beware. Not all of the "deals" out there are deals at all.

I just KNOW someone somewhere would be laughing all the way to the bank (pun intended) if I bought into either of those deals.

I'm not saying there aren't a select few out there who cannot benefit from some of the programs out there. But most have to live in an area where no depreciation has taken place in the past 2 years...

Some in the real estate and lending industries feel the most touted "programs" are merely publicity stunts. They wouldn't be surprised to find out some conglomeration of lenders lobbied for such programs. The main benefactors of many programs are not really homeowners, but lenders... "Just follow the money," they say. 

I certainly don't even know if the "Obama" program being pitched by my loan servicer was really tied to the "stimulus package". It could just be that lenders are trying to find the "some people" out there who will think the offer is a good deal because they used certain buzzwords in the sales pitch.

If you hear "Bailout" "Obama" or "Stimulus Package" watch out. Slow down. Do your homework.

The lender could just be trying to stimulate their own bottom line...

 

 

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Comment balloon 10 commentsBenjamin Clark • April 20 2009 10:19PM

Comments

Benjamin, we live in the age where everyone needs to do their homework.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) over 10 years ago

I wonder how many are working these kinds of deals and taking people for a ride.

Posted by Shane OnullGorman, Eau Claire Wisconsin, Real Estate Agent & Realtor- Buy or Sell (Eau Claire Realty, Inc.) over 10 years ago

Benjamin:  Wisely put.  We all have to read the fine print and do our homework on these so-called deals.  Buyer beware.

 

Posted by Claudette Millette, Buyer, Broker - Metrowest Mass (The Buyers' Counsel) over 10 years ago

This situation is nothing that surprises me, as one of the so called big mortgage companies is still out there with employees pulling the same old con games that got us into some of this mess to begin with. Even under the watchful eye of some government officials these people are still taking the American public for a ride!

Posted by Cathy Worrilow (Farm & Home Real Estate & Auction) over 10 years ago

Thank you for sharing your insights and information.

Posted by Jim Crawford, Jim Crawford Atlanta Best Listing Agents & REALTOR (Crye-Leike REALTORS®) over 10 years ago

Thank you for this excellent post. It's great that you draw attention to the fallacy in trusting without verifying.

Posted by Vickie Nagy, Vickie Jean the Palm Springs Condo Queen (Coldwell Banker Residential Real Estate) over 10 years ago

I wonder how many people are really being helped. The whole thing seem like a scam the the American people will be paying back for a long time. While our tax paying dollars are still paying for the rich to get richer.

Posted by Elizabeth Benefield (Montana Country Real Estate) over 10 years ago

Ben, great heads up, your right about what banks and lenders might be trying to pull with all this stimulus money and "plans" out in the market place.

Posted by Christopher Bonta, Realtor, Integrity and Honesty (The Bean Group) over 10 years ago

Part of being a good real estate agent is making people aware of the pitfalls they will surely encounter along the path to buying, selling, building, refinancing, etc. Great comments.

Joel Carson

Prudential Utah Real Estate

Posted by Joel Carson over 10 years ago

Thanks for the comments guys!

 

 

Posted by Benjamin Clark, Buyer's Agent - Certified Negotiation Expert (Homebuyer Representation, Inc.) over 10 years ago

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