Another “no closing fee” scam!

Honestly, how stupid could anyone be to believe this type of false advertising.

I was just over at the Bank Of America website doing some banking and what did my eyes come across in the mortgage section?

The “No Fee Mortgage Plus” offer which states “No Closing Fees”.

Better yet, the advertisement says - “No Fees. No Worries. No, Really.”

However, when I pulled up the “terms and conditions” fine print - here’s what the term no fees really means.

One of the first statements I saw was the fact that a complete copy of the terms will be provided prior to closing the loan.

That’s odd, wonder if they have something to hide I said to myself…hmmmm — after reading further I was convinced they just might.

Let’s just take a look at some of the no fee conditions;

Bank of America says…

“Fees do not include and the bank will NOT pay for”…

Taxes
Interest (prepaid interest OR discount points)
Insurance

Just shortly after I stopped laughing my ass off, I came to this conclusion.

If this is a no fee first mortgage loan, and you still have to pay points (interest), taxes, insurance, etc. Then just what the heck fee are they talking about you not paying?

Here’s the deal, in the mortgage loan business the term “fee” is SOOOO misleading it suckers in all but the most savvy of borrowers.

It’s all just a word game, and you HAVE to be aware it get’s played ALL the time.

For example, a borrower calls a broker and says give me your lowest interest rate and I’m NOT paying any points.

The broker thinks to himself, oh no points no problem. I’ll just put the cost on the mortgage broker fee line OR maybe just increase the misc. fees and spread out the fees and call them something else. That’s easy.

Let me tell you right now, title fees are a FEE!

A tax can be considered a FEE!

Pre-paid interest or “points” is a FEE!

Just take a look at any Good Faith Estimate and you’ll see the word “fee” on there about 20 times.

My guess is, that if it’s a no fee mortgage loan, they are probably adding a $500 fee and then crediting it back or waiving it — but if you charge it then give it back it makes it a no fee loan then. RIGHT! (not really)

Is it legal for banks and lenders to say no fee and really mean lots of fees?

Yes, it’s legal to say no fee, but is it ethical? Is it really of value to you? OR is it intended to mislead you and get you committed before you know what hit you.

Your best bet is to have a mortgage plan. Something that you can follow and that gives you good, knowledgeable questions to ask so you’re in control of the process.

Use the main menu to develop your own plan and take some control back before you go believing those less than honest ads.