Lenox Financial Mortgage Review
Lenox Financial Mortgage is known for their ever-present radio campaigns touting “no cost” refinancing and is the prime example of what I call “deceptive or incomplete” advertising.
Refer to my article, “No Closing Cost Mortgage Advertising Is a Lie” to see how Lenox Financial and others pull the wool over the eyes of the average mortgage consumer.
You can tell a lot about Lenox Financial Mortgage by the way they advertise. For example, what do think of a mortgage company that employs “hard sell” outbound telemarketers that bug you at dinner?
Nothing good, right?
If you notice in all those Lenox Financial Mortgage radio ads, they say things about how closing costs are a rip-off and act like they invented the “no cost” loan. Nothing could be further from the truth on both accounts. When folks take credit when credit isn’t due, that says something about them. And this says something about Lenox Financial Mortgage too.
Nothing good, right?
So my advice is stay way from them. Use a local mortgage broker who markets with integrity, doesn’t employ questionable marketing messages, and doesn’t take credit for things he shouldn’t.
To learn how to find a local ethical mortgage broker , use The Mortgage Advantage and end mortgage shopping forever.
UPDATE 9-25-07: Lenox Financial Mortgage settles a consumer fraud lawsuit with Arizona whose Attorney General claimed the company violated state law when they advertised “no closing costs” mortgage without the requisite disclaimer that not everyone would qualify for such a mortgage.
Lenox Financial CEO John Shibely whose voice you hear on the ever-present radio ads pronouncing his “no cost refinance” is the “biggest no brainer in the history of earth” signed the “assurance of discontinuance” as a commitment to cease the fraudulent practice or discontinue advertising and paid the $95,000 fine and the State’s court costs.
Given the fact that Lennox Financial Mortgage probably makes $95,000 a week on the Arizona loans they pull with their deceptive ads, the real “no brainer” for Mr. Shibely was paying the fine and never letting this case see the inside of a court room.
If it ever did, the real injustice and deceptive nature of the term “no cost” would really come out. The truth being, the borrower still pays the costs on a Lenox Financial Mortgage “no cost” loan, it’s just in the form of a much higher rate…and the jury would have awarded millions of dollars in damages…not the pittance Arizona State levied.
But at least it’s a start. Shining the light on false advertising in the mortgage industry is a tough row to hoe, especially with the likes of Lenox Financial Mortgage. Good work Arizona and kudos to your Attorney General Terry Goddard (and Cherie L. Howe who actually prosecuted Lenox Financial) for having the ba**s to stand up to these just-under-the-wire legal corporate con artists!
Now get your legislature to pass a law like California making the words “no cost” or “no fee” illegal and you can go after them for what really matters!
Good Luck!
Author: Rob K. Blake
Published January 14, 2008
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Mark,
Wow! You ask for my help…and then bawl me out.
If you were sold on this idea, why waste my time and yours?
But since you did, I’d really like to know the outcome.
Would you be so kind and honest, even if the outcome seeking this loan is not as advertised to come back…and update us on what happened?
I’d really appreciate that…
Good Luck to you…I have a feeling you’re gonna need it.
RKB
July 24th, 2008 at 10:27 amRob,
Now I can’t leeave your comments unanswered. You are the very type person that makes my head spin when I think of the arrogance you mortgage people have to decide can I make my payments. … Your the reason I hate mortgage people. … Your condicending attitude makes me want to puke…. I was turned down because … It just so happens to take our income below the limit that most normal working peoples percentage of what a house payment should be. … Except you arrogant narrow minded people who tell me how to spend my own money. … So a lennox agent has learned how to beat the fannie mae computer. …. I appreciate someone looking at my situation with a brain and not a computer. Thanks for letting me vent. Maybe you might want to get a heart and learn how to see more than the bottom line. Not all lenoox lenders are trying to rip people off, maybe there just trying to help them get what they really want and can afford but due to lack of common sense and an abundance of arrogance in the lending industry and many times greed they can’t get a home.
July 24th, 2008 at 9:31 amEnough said.
Mark,
I sounds like not only have you fallen in love with idea of home ownership, you’ve fallen in love with a house too.
If you, as a self-employed person, have in fact provided all your income documentation to 4 mortgage companies only to get denied…THAT SHOULD TELL YOU SOMETHING.
The foreclosure crisis was caused by many lenders who used “Stated Income” or “Bank Statement” loans to qualify folks, many of them self-employed, who should never have been given a loan in the first place.
In the best case scenario Lennox is blowing smoke about the approval.
In the worst case, you get a stated income loan you should never have had in the first place…and you add to the foreclosure rolls 18 months from now.
Everyone is screaming about irresponsible lending…and lo and behold…Lennox is still do it!
Where on God’s Green Earth are the regulators?
July 24th, 2008 at 8:22 amRob,
July 22nd, 2008 at 5:15 pmThe reason we want to buy mow is in our area of the country the house we want has a basement and is over 5000 sq ft. the house has been on the market for 9 months. It started at $260,000 and now they will sell for $220,000. It’s a 14 yer old brick home. My realtor friend has been helping me find property (He gets nothing out of the deal since he is not doing the buyers agreement. He feels the house is worth minumum $235,000.
He says in this area we are at the bottom and have started to rebound since there are not that many homes available to choose from now compared to last year. Since stated income loans are not available now with only a 10%down payment, we feel next year this house will be gone and who knows how they will treat self employed people with not enough net income on a tax return. I have spoken to 8 companies and 4 have pulled all documents to see all the facts, including lennox. they are not requiring tax returns but only bank statements to varify income. So why wait. We need a very big home for our family size and don’t want to buy something to small for the money. This home gives us that space needed unlike most homes in our area. I’m listening too you so help me see I can have hope in a year.
Mark,
First let me address the “if I don’t buy now” issue.
Real estate values are slated to fall another 20- 30% over the next year. Why are you in a hurry to lose money?
Wait until this time next year and buy a house today worth $130,000 for a $100,000.
You’ve waited 48 years…wait 1 more and save $30,000-$60,000.
Next item…since I don’t know all your information - it takes at least 20 pieces of data - to “prequalify” someone - and even though you gave a few pieces, I’d need them all to render a usable assessment as to the validity of the “others” saying “no” or Lennox saying “yes”.
It’s easy to say “yes” or “no” without all the data.
What you need is to wait a year…let prices hit bottom…then find an ethical, local, mortgage provider who doesn’t spout off “approvals” just to get the business.
The real way to shop for a mortgage is not listening to radio commercials but to get educated on how to correctly shop for a mortgage. The Mortgage Advantage can help you there.
Good Luck!
July 22nd, 2008 at 4:51 pmRob, I am self employed with a cash flow of 120,000 a year. I took all the basic deductions on my tax returns for the 20 years. I have a credit score of 791 and my average monthly net income is 2000/month after deductions. Lived in the same house for last 13 yrs renting. I have 8 kids and have been turned down more times for a mortgage then I care to think of. I hate this. I can afford a $1500/month p&i payment including taxes. I waste $1700 a month now in rent plus wasted extra rent and utilities for another office that I’d rather move into the house I want to buy. Lennox is the only one who says they can help me and not charge me 8-9% interest on a 30 yr loan.
July 22nd, 2008 at 4:26 pmMy seller is paying closing costs and I am paying a portion myself with a 10% downpayment. Why shouldn’t I take the loan when everyone else won’t touch me? If I don’t get some equity growing at my age of 48 I’ll never get out of renting and wasting my money. Any Advice. Thanks
Justin,
Happy you found us in time! Trust your instincts, never believe a radio or TV spot when it comes to the mortgage business.
Good Luck,
July 8th, 2008 at 12:40 pmRKB
Very glad i found this website. Definitely thought the sales guy that called me was very shady and exactly the same complaints listed on this site.
If it sounds too good to be true, it probably is! Thanks for this great website
July 8th, 2008 at 12:16 pmJames,
Glad you found us and our information valuable. High pressure telemarketing techniques are the tell-tale sign of a company you want to stay away from….good job!
RKB
May 29th, 2008 at 10:26 amHi! I am just an ordinary consumer living in the Tampa bay Area. I have listened to those “Biggest No Brainer in the history of Earth” forever it seems . I finally called, Thinking these guys might be real;in the course of the discussion ,he stated unless A decisdion is made to day ,there are no guarantees.I responded that More research on Lenox , was needed ,such as the Clark Howard Show , Before I go forward. Would you believe He Never called me Back?
May 26th, 2008 at 1:43 pmThanks for the Infomation on your website. I thought it was too good to be true.
Janet,
In response to your “basic question about refinancing: if we are thinking about selling our home within 3 years does it still make sense to refinance?”
This is a great question…so good in fact, I’m going to add it to the Q&A Refinance Section…please visit it there for an in-depth answer.
With that said, I will say it “depends”.
It depends on a number of personal circumstances which only you can answer.
In other words, a “basic” question can get really complicated. The answer is different for everyone.
See you over in the Q&A Section!
April 13th, 2008 at 12:31 pmRKB
Rob,
I am thinking about refinancing my mortgage and rolling in our home equity loan. I am in the process of collecting rates and terms and I was going to look at Lenox. Based on your article and other comments I think it would be prudent to look elsewhere. I would like to ask a basic question about refinancing: if we are thinking about selling our home within 3 years does it still make sense to refinance?
April 13th, 2008 at 12:06 pmStrange, as part of my shopping, I filled in the form on Lenox web site to have someone call me and go over their offerings. No one called.
Even more odd is, there is Lenox financial, which advertises “biggest no brainer in the history of “earth”. And there is Leonx Home Loans, which advertises “biggest no brainer in the history of mankind”. One is based in Atlanta, one is based in Calirfornia. THey appear to be seperate entities with nearly identical names and marketing.
Neither of them called back. I guess they are too busy. Oh well, keep on shopping.
February 6th, 2008 at 1:33 pmInteresting…I am looking to refi right now. Doing some competative research…
I took one look at Lenox Financials site and said to myself: “you have got to be kidding me!” I would never take advice from a man who still wears fringe on a jacket!!! Do your due diligence and don’t believe the hype!!!
January 31st, 2008 at 9:15 amCA - Thanks for commenting…a joke on the American consumer. Grow up and fly right is my advice to Mr. Shibely.
Pat - Annoying = Memorable in most peoples mind. And of course, that’s exactly what he’s counting on..
Kevin - I don’t know if your are a plant or just the luckiest Lenox Financial consumer in the world only getting .25 point bump.
Everyone who has ever attempted a Lenox “no cost” got a FULL 1% Rate Hike!
I think I just answered my own question…
Good Luck,
January 30th, 2008 at 11:56 amRKB
I did business with lennox and I understood going into a no closing cost mortgage usually has a higher interest rate by about one quarter point. This is usually true with any lender. I do not feel it is deceptive, but an industry practice. I would rather hold on to my money up front than pay closing costs, it leaves the door open to refinance and refinance again without spending my money. Let the bank take the risk on all the fees, because if rates go down, I’m looking for a new no cost mortgage. Most these fees are just pre-paid profit to banks, attorneys and insurance companies. It is a no brainer!
January 30th, 2008 at 1:27 amI just hate that commercial! John Shibely sounds so stupid, he’s actually funny the first 20 or 30 times you hear it. After that, it’s just annoying. Steering away from this outfit is the “biggest no brainer in the history of earth”! Thanks for the informative website!
January 29th, 2008 at 8:40 pmI just heard this commerical and I found myself wondering who this goofball was. I had to google and see if the commerical was a joke or something. He sounds like a beer buddy just talking about random **** as opposed to someone that I would trust to do something as important as my mortgage. He and his company sound like a real joke. I would never use a fly by night operation like Lenox financial. The biggest no brainer in the history of earth?? Grow up
January 29th, 2008 at 7:45 pmI can’t agree any more. I so appreciate the post. Lenox Financial should be fined. jailed and then puit out of business.
January 28th, 2008 at 7:19 amThanks Roland,
December 17th, 2007 at 2:30 pmI couldn’t have said it better myself!
Great website. I cringe when I hear the Lenox Financail Mortgage commercials. I’ve been in the mortgage business since 1991 and I am always suprised when borrowers try to compare my rates with the teaser rates they hear on tv and radio. I try to educate them and even show them my ratesheets to try and explain to them how they (Lennox Financial and the like) are offering “No Cost ” loans. After doing the math with my clients, they understand that a mortgage always has a cost. Its a “pay me now, or pay me later” deal. The sooner borrowers understand that one loan does not fit everyone, and that they need to talk to a professional that will take their individual situation into account, the better off they will be.
December 17th, 2007 at 2:10 pmDavid,
It isn’t and there are ton of reasons why.
Read everything on this site on “no cost” loans, Lenox Financial Mortgage and yield spread premium to understand all of them…too numerous to list here.
Suffice it to say, locating a local, ethical mortgage broker is always a better shopping strategy than calling national call center operations.
As I’ve said many times before, use a phone to get a pizza delivered is probably OK…but your single largest financial decision deserves a more respectful approach.
Good Luck,
November 28th, 2007 at 10:39 pmRKB
I just got a no cost good faith estimate from lennox and I thought it was pretty good. They offered 5.87 versus 5.5 from other lenders charging 6000.00 to close. (250000 @ 15years). Is that not reasonable?
November 28th, 2007 at 9:37 pmHey rob: I have a question. I refinanced my loan with Lenox Financial in October because I was trying to get out of the ARM and they were the only place that would refinance me due to the LTV on my home. Everything went fine. I actually worked with over 10 different lenders to try and refinance and they flat out said no. I did not pay any closing costs as the promised but they did lock in my loan at 9.25% for 30 years. The one problem is that it has a 3 yr prepayment penalty. Is that legal?
November 28th, 2007 at 3:44 pmHey Rob
Thanks for all your help. LoanAce is a pretty cool software and easy to use. It just doesn’t have the Pre-Qual form but that’s okay. I understand you was in the Army. I was in the Army for 10 years as a Supply Sergeant. Again, thanks for your help and I will continue to listen to the podcast. It’s very informative.
August 1st, 2007 at 4:47 pmHorace,
I’d love for you to get your own business and give the folks of Atlanta an alternative to those “no-cost” slimeballs at Lenox Financial.
Check out LoanAce…it’s FREE! Not the $1,000 price tag of those others. So download it …play with and see what you think.
Good Luck,
August 1st, 2007 at 12:06 pmRob
Hey Rob
Thanks for the respond. I have a question for you. I live in Atlanta and like I had mentioned I am new to the mortgage business. I am looking to start my own mortgage company in a year or so. What is the best LOS program to use - Point, Byte, or Encompass? How did you get started in the mortgage business?
August 1st, 2007 at 9:10 amHorace,
That’s exactly what the Mortgage Insider website is all about!
Thanks for stopping by and commenting. If more folks did, other readers would know our website is all about uncovering the lies…thanks again for the support
Rob
July 31st, 2007 at 4:35 pmRob
July 31st, 2007 at 4:28 pmI am new to the mortgage business but I have studied finance and money matters for a long time. I agree with you. There is no such a thing of a NO COST loan. I live in Atlanta and hear that stupid Lenox Financial commercial all the time. It really ticks me off to hear how people just want to do any thing to get clients. What happen to educating the client to steer away from cr*p like a NO COST loan.
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