{"id":1277,"date":"2007-04-09T00:04:21","date_gmt":"2007-04-09T07:04:21","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1277"},"modified":"2007-04-09T00:04:21","modified_gmt":"2007-04-09T07:04:21","slug":"the-new-bait-and-switch","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1277\/the-new-bait-and-switch\/","title":{"rendered":"The New Bait and Switch"},"content":{"rendered":"<p>The term &#8220;bait and switch&#8221; is a favorite amongst consumers when dealing with mortgages. It&#8217;s a refrain heard every day in our industry. Somehow uttering this term gives consumers personal strength and a sense of confidence. &#8220;I&#8217;m not going to fall for any &#8216;bait and switch'&#8221; is a chant designed to ward off the specter of the deed made famous by unsavory mortgage brokers and loan officers. I can&#8217;t blame consumers for doing it either, I do the same thing to car salesmen by saying &#8220;I&#8217;m not going to want the dealer warranty&#8221; before I even take two steps on the lot. Even if it isn&#8217;t the perfect elixir, it feels empowering, which is something. What most mortgage borrowers don&#8217;t realize however is that their old foe the &#8216;bait and switch&#8217; has morphed, like any terrible virus, in to a new strain of deceit which is being exacerbated by the current market.<\/p>\n<p>First, let&#8217;s recap what the &#8220;old,&#8221; unsophisticated bait and switch schemes consist of. The &#8220;bait and switch&#8221; consists of promising loan terms that are good enough to get the borrower committed (&#8220;off the street&#8221; in industry parlance) and then, after they put their time and energy in to the process, delivering significantly different terms on their loan documents at the signing table. The hope being that the customer is too exasperated or desperate to put up much of a fight, and they accept the new terms. This can take the form of any of the following (and more based on loan officers&#8217; personal proclivities):<\/p>\n<ul>\n<li>A low rate that is suddenly higher<\/li>\n<li>Loan type is suddenly different (i.e. from a fixed rate to an ARM)<\/li>\n<li>Loan fees are suddenly significantly higher, much higher<\/li>\n<li>Prepayment penalties suddenly arise<\/li>\n<li>Significantly less cash returned to the borrower than anticipated<\/li>\n<\/ul>\n<p>Luckily consumers can be vocal, and were in complaining about these unsavory practices; hence the &#8220;bait and switch&#8221; buzzword arose to describe this industry practice. However, while the &#8220;old&#8221; way of bait and switch was outed; a new, more subtle form has quietly arisen. The worst part? It is completely legitimate under existing laws; and very hard to prove. <\/p>\n<p>The new <a href=\"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1277\/the-new-bait-and-switch\/#more-1277\" class=\"more-link\">Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The term &#8220;bait and switch&#8221; is a favorite amongst consumers when dealing with mortgages. It&#8217;s a refrain heard every day in our industry. Somehow uttering this term gives consumers personal strength and a sense of confidence. &#8220;I&#8217;m not going to fall for any &#8216;bait and switch&#8217;&#8221; is a chant designed to ward off the specter [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-1277","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":11760,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/11760\/performance-bonds-for-real-estate-escrows\/","url_meta":{"origin":1277,"position":0},"title":"Performance Bonds For Real Estate Escrows","author":"Brian Brady","date":"April 23, 2010","format":false,"excerpt":"The world of distressed real estate (only about 90 of my past 100 transactions) is a funny one; all the rules are different. The REO sellers are pretty simple.\u00a0 They have a take it or leave it policy when it comes to negotiations, escrow terms, etc..\u00a0 Some short sellers however,\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1319,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1319\/when-banks-compete-you-lose\/","url_meta":{"origin":1277,"position":1},"title":"When Banks Compete, You Lose","author":"Morgan Brown","date":"April 19, 2007","format":false,"excerpt":"Brian Brady wrote a great series of articles on how to obtain the best mortgage loan by shopping for a mortgage originator first, and then the loan second. His brilliant advice is a bit counter-intuitive but dead on. If you are considering shopping for a mortgage by using the internet,\u2026","rel":"","context":"In &quot;Real Estate&quot;","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10588,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10588\/two-turtle-doves\/","url_meta":{"origin":1277,"position":2},"title":"One Turtle Dove","author":"Geno Petro","date":"December 18, 2009","format":false,"excerpt":"The Glass Ceiling I remember the moment I decided to stop wearing a suit and tie in public---forever. It was a couple days before Christmas and I dropped by the K-Mart to pick up a punch bowl for the office party.\u00a0 I was looming\u00a0 in Housewares when an elderly woman\u2026","rel":"","context":"In &quot;Disintermediation&quot;","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16380,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16380\/two-turtle-doves-2\/","url_meta":{"origin":1277,"position":3},"title":"Two Turtle Doves (revisited)","author":"Geno Petro","date":"December 18, 2016","format":false,"excerpt":"I was weathering a Category 1 hangover the day my big fat Vice President dropped by the office and found me asleep at my desk. He\u2019d come to personally deliver my Christmas bonus (a twenty-dollar bill stapled to a battery-operated Rudolph necktie) and to spread some holiday cheer to the\u2026","rel":"","context":"In &quot;Real Estate&quot;","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1820,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1820\/redfin-lessons-in-how-not-to-succeed\/","url_meta":{"origin":1277,"position":4},"title":"Redfin: Lessons in How NOT to Succeed","author":"Jeff Kempe","date":"August 18, 2007","format":false,"excerpt":"No apologies for the topic. As many problems as exist in the real estate industry -- many more than the practiced elites would like to acknowledge, many fewer than the bubbleheads need to satisfy their tantrums -- Redfin has made itself a prominent example of how not to improve things.\u2026","rel":"","context":"In &quot;Marketing&quot;","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3164,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3164\/the-unchained-originator-ken-stampe\/","url_meta":{"origin":1277,"position":5},"title":"The Unchained Originator: Ken Stampe","author":"Brian Brady","date":"May 26, 2008","format":false,"excerpt":"I was disappointed with the low turnout of loan originators at UNCHAINED. There were two local originators, who attended our Mesquite library performance, and my buddy Ken Stampe. Ken and I met in 2006, on Active Rain. He was one of the first to sign up for Unchained. His only\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1277"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1277\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}