Mortgage News: December 2007

Tuesday, December 11, 2007

Example of Why Reading the Fine Print of Websites is Important

You may have heard this... "Big print giveth... little print taketh".

This is important both online and offline and especially for anything you sign.

I took screen shots in case things change on the site after the post. Pictures speak a thousand words, so here you go. I'm sure plenty of you will have something to say about this advertising from Bank of America.

Bank of America launched the No Fee Mortgage program which has been a huge success for them. Here is a screen shot of the site.

Seems welcoming like a great deal.

The Big Print.

No Mortgage Fee's, No Private Mortgage Insurance, Best Value... etc.

Almost too good to be true? I'm sure many people jumped on the opportunity. In fact, from Oct. 18 press release B of A stated... "First mortgage originations rose 27 percent helped by success of No Fee Mortgage Plus, which accounted for 21% of first mortgage productions in the third quarter."

See those tiny blue links or the small text at the bottom... terms of service, clicking link that will get you this.

Little Print Taketh.

Read carefully where I've underlined and you be the judge of if the little print matches the offer of the big print.

Now I'm sure this is simply to protect B of A and I'm sure B of A delivers these loans as you can see from the various Inman news post and history of this loan starting here, then this, and most recently with this.

Additionally, well respected Mr. Guttentag - aka (mortgage professor) did a comparison of this loan to see if there was real savings with the program.

Here were his results...

The results were mixed. In the 11 comparisons I did, Bank of America's prices were lower in five and higher in six.

The loan does exist but not necessarily as expected for the average consumer who simply looks at the big print.

What is also interesting is that the advertising a "no fee loan" was based on a loan that actually had fees associated with it?

Any thoughts or personal experiences regarding big print / little print?

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