Mortgage Lock Fraud Abounds

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.

Why do originators tell mortgage lock lies?

They tell lies simply to cover mistakes made at the time they quoted the rate. If they forgot to adjust the rate for low credit scores, higher loan-to-values, or to waive escrows, these mistakes become evident at the time of lock.

Loan officers also tell lock lies because of a false belief they can “call the market” and pick the day that makes them the most yield spread premium, they will risk your mortgage lock and lie to you about it.

What if they are wrong?

When they are wrong and the market moves against them, you get the higher rate and costs…paying for their mistake.

The most important thing you need to remember is the loan officer will NEVER pay when a stunt goes wrong.

It becomes your fault with false excuses of “undisclosed” information or an increased rate at closing in the hopes you’ll just sign the papers.

This mortgage lock lie is a gamble with no downside for the originator…why wouldn’t they do it?

Read the post, “Rate Lock: Get It In Writing“, to help you understand how to thwart this money-stealing lie!

Another option is to find an ethical mortgage provider in your home town who wouldn’t dare lie about your mortgage lock.

Learn how in our mortgage shopping system today.

Good Luck!

Author: Rob K. Blake
Published April 2, 2008

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