Down payment assistance programs like The American Dream Down Payment Assistance are all but outlawed for use with any government insured loan programs.

It’s about damn time!

I can hear you now, “What’s wrong with charities helping home buyers by giving down payment assistance?”

In a word, it’s a scam…that’s why!

Mortgage originators tell you your mortgage lock is in force when it is NOT. Lying about your mortgage lock status is a common practice to increase loan revenue or cover loan officer mistakes.

Loan officers are always trying to make the most yield spread revenue on every mortgage. Telling you the mortgage lock is placed but then not actually locking the rate with the wholesale mortgage company allows them to “play the market” with your money.

A Florida mortgage broker found a way to rip-off people he never even met: the home seller! Mortgage broker greed reaches an all time high with this unconscionable scam.

So I was over checking my blog on ActiveRain and ran upon a Florida real estate agent who sparked this post. His comment said a buyer client was told to ask the seller for 6% in closing costs!

I’ve compiled a few resources on average mortgage rate data and yield spread premium starting with Congressional testimony from experts and ending with average mortgage rate resources online.

Be sure to read the Harvard Professor Jackson’s testimony if nothing else….

Mr. Olson’s Senate Testimony

HUD’s RESPA FAQ Site

Harvard Professor’s Conclusions on YSP

Mortgage yield spread premium is responsible for up to two thirds of the revenue earned on every mortgage. Yet most Americans have no knowledge of mortgage yield spread premium or how to avoid it.

Never use a real estate referral from a real estate agent to locate your mortgage company as you may find yourself the victim of a common con game. Real estate referral cons can cost you dearly!

This is another scamming retail mortgage provider: the new home builder mortgage company. These companies are subsidiary mortgage banks owned by the new home builder. They will never broker a loan.

The servicing mortgage company is the company to whom you make your payments. The servicing mortgage banks prey on your erroneous belief you can save time and money refinancing with them.

Refinancing with your current servicing mortgage company gives absolutely no cost or time savings!

But they know, you don’t know that.

The mortgage application deposit scam is a long running scam. The idea is to get your mortgage application and the accompanying deposit at all costs!

Saying or doing virtually anything to get your signature on the mortgage application along with your deposit is the name of the game.

Typical sales “hooks” used in the mortgage application deposit scam:

The best mortgage is never found by collecting a handful of Good Faith Estimates or by calling around getting mortgage rate quotes. Yet this is THE shopping method for most.

If you define the best mortgage as the loan having the best mortgage rate, the lowest costs, and the one that fits your financial circumstances in both the short and long term…then standard comparison shopping methods will not work.