In recent years, mortgage loan officers have developed a nasty reputation for being "sneaky", "sleazy", and just plain "evil" when it comes to their lending practices. The truth is, almost all loan officers are genuinely caring people who really want to help homeowners, and help people become homeowners. However, there are always a few bad eggs, and in this industry, those bad eggs have tarnished the reputation of the trustworthy professionals.
Although most loan officers are good people, there are some bad ones out there, and you should be aware of their dirty tricks in order to protect yourself from them should you encounter them.
The most famous trick is the "bait and switch", whereby a loan officer will lure in a client with the promise of "low rates and fees". Usually they will even lie about the costs of the loan on the good faith estimate and truth-in-lending statement. When the borrower gets to the closing table, they realize that the costs are significantly higher than what they were told. The sad truth is, most people are desperate at this point and go ahead and sign for the loan anyway. They do so because they so badly want the home.
