BottomLine Personal
March 15, 2005

Now that Interest Rates are on the rise, so are Sneaky Tricks

Now that interest rates are on the rise, so are sneaky tricks by the mortgage industry to bring in more business, says lender Michael Moskowitz. Watch out for the "bait and switch" -- you're offered an attractive low rate, which becomes higher at closing. Or your closing is stalled deliberately so that your rate lock expires and a new, higher rate is assigned.

Self defense: Work only with reputable lenders. To find one, get a referral from someone you trust, or study ads carefully. Get everything in writing from the lender -- not just the mortgage broker, if you use one. Make sure the mortgage broker explains his fees, which should not exceed one percent on a loan over $100,000 or half a percent on a loan over $500,000. To avoid processing delays, gather documentation and fill out applications as quickly as possible. If you think the lender is stalling, file a complaint with your state banking department or attorney general.

Michael Moskowitz is president of Equity Now, a New York-based direct mortgage lender licensed in six states. He has addressed state banking supervisors on ways to prevent mortgage fraud and advised New York State Assemblyman Scott Stringer on developing a bill to prevent lending abuses.

Equity Now can be reached at 1-800-692-LEND; or by logging onto the company's secure website: www.equitynow.com.