How to protect yourself from deceptive online mortgage advertising

Because the mortgage market has slowed in recent months and the Internet phenomenon, mortgage companies (lenders and mortgage brokers) have found a new way to get business. They purchase mortgage leads from Internet lead generation services.

What is a Mortgage Lead A mortgage lead is an application with consumers home loan information, who lenders, mortgage brokers and loan officers can hopefully convert into borrowers. If you were attracted by an ad such as "mortgage rates as low as 1%" or other teaser rate solicitations, and filled out an online form, you are a lead.

Internet Lead Generation With the development of the Internet, the lead generation industry has changed dramatically. Most leads are now generated not by loan providers but by lead generation companies who most of the time know nothing about mortgage lending and make MILLIONS OF DOLLARS selling your information to multiple mortgage providers. You see ads on TV and online: "Get up to 4 competitive quotes from lenders" or "Lenders compete for you, you win". Yes, that may be true but watch for the phone ring when you make that fatal mistake of responding to those Internet solicitations. Your information may be sold to more than 4 companies. I have been told by home borrowers were receiving up to 20, 50, 100 calls from mortgage companies. Phone calls continue for a very longtime as lead companies recycle leads and sell them over and over.

When they say "we don't care how bad your credit is", they are saying the truth, they really don't care because they are not the ones who will sell you the loan. We all receive mortgage solicitations via email everyday. Our spam folder is inundated with mortgage solicitations from lead generation companies. be aware that your information is worth $35 to $50. So if they sell your information to 4 different companies, lead companies can easily make $150 to $200 per lead. That is a very lucrative business and some companies make MILLIONS OF DOLLARS. You can see mortgage solicitations on all major sites such as Yahoo, MSN or any websites with high traffic.

Before the invention of the Internet, lead companies were only targeting borrowers who could refinance into a lower rate. Today Internet leads cover a wide range of consumer concerns. For example, consumers with lots of credit card debts might be enticed with "Pay off high-interest credit cards", or "Consolidate all your debts into one low monthly payment". Homeowners with adjustable rate mortgages who are worried about rising future payments might be receptive to "Rates are rising, lock in a fixed rate today." One of the most popular online solicitations is the famous but nonetheless dangerous option ARM "$310,000 Mortgage for under $999/Month!".

Whether the loan providers will be able to deliver on these wonderful promises is wholly irrelevant to the lead generator. They are not in the business of lending, they are just in the business of selling leads to mortgage brokers who make thousands of dollars on most loans they sell you.

Why You Should Not Respond to Most Online Solicitations Lead generation companies have no responsibility to borrowers, and offer absolutely no warranties about the loan providers to whom they sell leads. Since the "bad guys" in the industry get very few if not, no referrals from satisfied customers, they are much more dependent on leads than the "good mortgage professionals". And that means that consumers who become leads and respond to the mortgage providers who contact them, may face dire consequences. In responding to a solicitation, your chance of getting a bad deal is greater than if you do your due diligence.

If you want to find out if you are responding to one of those lead generation companies' solicitations, look at the overall website. If the content of the website does not relate much to mortgage, then you are better off not responding to their solicitations. However some lead generation companies that are very well know and do much advertising online and on TV, have been able to build a website with good mortgage content. To get a better idea you may want to read their online privacy. If the home page is just an online application then it is pretty obvious that you may be dealing with a lead company.

My advice to you is simply grab the yellow pages and contact local mortgage companies. Being contacted by 20, 50 or 100 high-pressure sales people who just paid $35 to $50 to get your information is no fun at all.

Andre Plessis
"The Mortgage Guru" Website: apply-free.com I Teach People How To Create a Passive Income Through Real Estate & Have a Debt- Free Lifestyle".