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Fewer loans, more ads

Email|Link|Comments (3) Posted by Binyamin Appelbaum February 19, 2008 05:54 PM

You can’t tell the mortgage boom is over from the advertising on radio and television. Companies such as East West Mortgage Co. continue to heavily promote their ability to arrange loans, even for people with credit problems.

In part, companies are advertising more because they’re having more trouble convincing people to borrow money. The New York Times reported yesterday that the industry’s spending on advertising hit $409 million in the third quarter of 2007, more than companies spent at the peak of the housing boom in 2005.

Some of the pitches are surprisingly brazen for an industry whose leaders and lobbyists have lately been spending time acknowledging past excesses. One example recently delivered to the home of a colleague featured a picture of a baby on the front. Inside, it offered to lower his monthly mortgage payment by refinancing him into an Option ARM. The loan works like a credit card: You can pay less than your balance each month, but if you do, the balance grows larger as the interest accrues.

Readers: Are you being bombarded by offers to refinance? Have you heard or seen an ad that made you feel like we were living 2005 all over again?

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3 comments so far...

We found Bankrate on Boston.com and entered in some information for a refinance of a mortgage. My husband and I were bombarded with numerous phone calls from many companies. The calls were for mortgage rates and fees
much higher than noted on Bankrate.com.

After doing some research on Bankrate.com at

bankrate = bait and switch or

http://www.google.com/search?hl=en&q=bankrate+%3D+bait+and+switch&btnG=Google+Search

We found that this site is a haven for bait and switch mortgage advertising.

How could Boston.com allow such a company like Bankrate to advertise on Boston.com

Words of wisdom stay away from Bankrate.com

Posted by Marcy Rosenberg February 20, 08 03:51 AM

Well, I was just going to chime in about mortgage loan advertisements, but first, about Bankrate.com.

I read the Mortgage Matters blog on Bankrate.com, every day. It's awesome. If you are going to be taking out a loan, read it.

There is also a lot (a lot!) of great information on their website. How to get a loan, what loan terms mean, etc. Also, not just about mortgage loans but about credit cards and other types of consumer loans.

They also have great mortgage calculators, so you can see what you might be able to afford, and what you might be able to qualify for (not the same thing ...)

So, my recommendation would be, based on what the above commenter wrote, that you should visit Bankrate.com all the time, just don't enter any identifying information on the site.

Go to your local bank to find a loan ... they'll love to see you.

Posted by John K February 20, 08 02:22 PM

Regarding the advertising, I noticed three or four times over the past several days that "rates have never been this low!" and "borrow $400k for under $1200 per month!" ads fed from Google have started to re-appear on my own site.

Loans with teaser rates. Which are the devil's spawn.

So, yeah, it seems like it's 2005, again.

Posted by John K February 20, 08 02:30 PM