Florida Mortgage Broker Fools Sellers

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!

This is the most greedy mortgage broker tactic I’ve ever seen. I just hang my head in shame thinking we share the same profession.

Wait a minute! They aren’t mortgage brokers. They are Grifters just using the mortgage industry.

I’m not writing this to teach others to be con artists, but hopefully to safeguard any buyers, sellers and agents who could fall victim to this new scam.

Here we go…

The buyer wants to buy, but has no cash so he needs the seller to pay costs. Now that the market slowed, sellers are open to this. This Florida mortgage broker told the the buyer’s agent to negotiate for seller paid costs of 6%. But unless it’s a super cheap house…that shouldn’t be more than 3%. Fannie and Freddie guidelines allow for seller paid costs to a maximum of 3%. So right there we know this Florida mortgage broker turned con artist isn’t using a conventional loan.

Ummmm?? Why?

They could have a valid reason…or they could be switching the loan to an Alt A lender program that allows for a 6% seller paid maximum just to make more money. Since it’s coming out of the sellers pocket and not the buyers, the Florida mortgage broker must be thinking, “Not my client…who cares.”

Now, look what the Florida mortgage broker pockets at closing…6% minus 2% real costs leaving 4% on the bottom line…all on one loan!

Now we know why they switched the loan…to pocket a ton of surplus greenbacks.

4% is more money than either agent makes and the agent actually put the deal together!

But it gets worse. Now that the Florida mortgage broker has taken advantage of the seller’s weak position, it’s time to screw the buyer now too.

This Florida mortgage broker now assumably treats the buyer to the typical yield spread premium overcharge raising his rate by telling him the best rate he can have is X when X-.5% was available. That half percent rate bump creates another 2% of company income!

Now total compensation is up to 6% on one loan! That’s more than both agents combined will make! I’ll bet the agents don’t know this Florida mortgage broker is making that much money on their efforts. If they do know, they are part of the scam.

So protect yourself!

Keep reading, posting and learning as much as you can at our website so as not to fall victim to the Florida mortgage broker ripoff which I’m sure will soon be spreading across the country. After 15 years in the industry, I thought I’d seen every way to fleece folks…until now.

Protect yourself by learning how to locate an ethical mortgage broker with The Mortgage Advantage.

Author: Rob K. Blake
Published April 1, 2008

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