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Written By: Helen Kaiao Chang

Here’s what you need to know about how mortgage brokers really work: “When I have a client I really don’t like — he’s a pain in the ass — that’s when I charge as much as I can get out of them,” says Jack, a mortgage broker based in Southern California.

Jack, whose name has been changed for this story, offers some insight in to what a mortgage broker really thinks about his customers. Jack has been in the business since 2003 and he has done many millions of dollars in mortgage loans. His confessions show you the dark side of a business now in the lime light. But don’t despair, we show you how to fight back!

• Brokers pad genuine fees and invent new ones to make more money.

  “Brokers move fees around to make it look legitimate,” says Jack. “Credit reports cost up to $15 per borrower. But I have witnessed loan officers charging up to $100 per credit report.”"I’ve also seen admin fees – which are bogus fees — charged up to $400,” says Jack. “I have lowered my loan origination fee and shifted the charge to either my escrow fees or title fees or my processing fee.”

  Fight back! Get a good faith estimate, which shows the preliminary cost of the home loan, including the origination fee, interest rate, and processing, escrow and title fees. It also tells you your monthly payment amount, including principal, taxes and insurance.Also, don’t pay more than $15 per borrower for credit reports and don’t pay any “admin” fees! Finally, find out the amount of the standard processing fee – a genuine expense paid to a third-party who handles the paperwork of the loan. This is standard and non-negotiable, ranging from $495 to $695 in all 50 states. You can also shop around for a less expensive title and escrow company.

• Brokers have another name for “Origination Fees” — Profits.

  An origination fee is charged by the broker to orchestrate your loan. This fee goes directly to the broker (in addition to any rebate he earns from the lender). A “point,” 1% of the loan value, is a common fee, but this rate is negotiable and Jack admits that, “sometimes (agency managers) pressure loan officers to overcharge clients to make their numbers.”

  Fight back! Make sure to negotiate the origination fee. The larger your loan, the smaller the percentage should be.

• Mortgage Brokers make clients pay higher rates to increase profits.

  In addition to the other fees mortgage brokers earn, they get a rebate from the lender for sending them business. In other industries it’s known as a kick back, but in the mortgage industry, it’s perfectly legal!Jack bragged that he’s “charged borrowers, who really don’t know what the mortgage business is all about, two points.” He’s even witnessed another broker take advantage of an older lady who had a lot of equity in her property, by giving her a “one-percent option ARM (adjustable rate mortgage) loan. With that loan, the loan officer was eventually getting 3 to 4 (percent of the loan amount) back in rebate from the lender.”He summarizes it nicely: “The reason is to basically make as much money as you possibly can, while you can, and get away with it!”

  Fight back! Ask your broker what his or her rebate will be. You can verify it on your settlement statement, under “yield spread” or “rebate,” prior to closing.

• Mortgage brokers change the numbers at closing – “Oops!”

  Sure there are lots of numbers that go into a closing document, and people make mistakes – but not all errors are accidental.”I have also seen loan officers during signings telling the borrowers that they will change or lower the loan origination fee after the closing,” says Jack, but they “never did so,” he adds.Jack tells of one mortgage broker who basically lied to the home buyer. “The loan officer employed a notary broker who happened to be their friend. He convinced the notary to tell the borrower at the closing that the terms of what they are getting were exactly what they were signing. The borrowers just didn’t know much. They were buying their first home and they were promised that this was the loan they were getting, but they were not.”

  Fight back! Get a settlement statement before closing. The HUD-1 form gives borrowers a breakdown of all the expenses prior to close. The escrow company can give you this independent statement at least one week prior to closing, and it should match the good faith estimate within $200. Demand explanations or corrections of any significant differences.

• Brokers overcharge because you shop the loan or annoy them.

  In Jack’s view, a client trying to get the best deal is really just an annoyance. “The client will shop you around, tell you to price the loan at a certain rate, you do it, and then at the last minute, they try to change the terms of the loan or they’re going somewhere else.”
  Jack thinks that is a punishable offence. He declares, “By taking advantage of my time and being greedy, that’s when I say, ‘All right, I’m just gonna charge you extra for doing all this extra work.’”

  Fight back! Remember that you are the customer and you can always walk away. It may be a hassle to delay your closing, but three weeks of dealing with your loan is a small price to pay compared to losing your house because you got a lousy loan!

Smart consumers get more than one quote and compare them, but rates change daily so get all your quotes at the same time to have a fair comparison. When you find a loan you like, lock it and make sure you get written confirmation from the lender of the rate.

Written By: Helen Kaiao Chang

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George W. Bush needs a strong approval rating to get what he wants from Congress in much the same way you need a strong credit rating to get what you want from lenders. Bush wrecked his approval rating by a series of mistakes, errors, and inaccuracies – which is pretty much how you can wreck your credit rating! While Bush took five years, you can wreck your credit rating a whole lot faster if you aren’t careful.

9 ways to lower your Credit Rating

1. Don’t pay your bills on time. Even a single payment that is more than 30 days late can lower your credit rating! Paying your bills on time, every time, will increase your credit rating. Consider using an online bill payment service to ensure your bills get paid on time every month.
2. Don’t pay any bills at all! Your payment history is 35% of your credit score. If you ignore the bills, they have to go away at some point, right? Nope, your creditors will just send their collection agencies after you.
3. Ignore creditor and collection agency contact requests. Your debts are obligations, but sometimes these is flexibility on rates and schedules if you talk to your creditors. Hide from them and not only will you miss out on a chance to negotiate, but virtually every business and organization from your public library to the city’s department of transportation will turn you over to a collection agency, and you could actually see your credit score drop because of an overdue book fine or unpaid parking tickets.
4. Never review your credit report. Sure, it’s free – each of the three credit reporting agencies in the US (Experian, EquiFax, and TransUnion) are required to provide one free credit report upon request per year. And it’s easy – you can do it from your computer at work or from home. In fact, checking your credit report can alert you to any problems or inaccuracies with your credit, but a surprising number of Americans still don’t take advantage of it. Anyone looking to have good credit, and not wreck their credit, should check their credit score once a year and dispute all errors that are found to protect their score.
5. Hold as many low limit credit cards as you can. Low limit credit cards show creditors that you can’t get a higher limit – a red flag for any creditor. If you’re not looking to ruin your credit account, it is a much better idea to build your credit limit using only a few cards with higher limits. Low limit cards are also much easier to max out, or just to use a high percentage of your credit, leading to the next way to ruin your credit! Of course you are better off with a larger list of credit sources reporting on you, so if you have nobody reporting other than credit cards (like a car loan, mortgage student loan etc) getting 3 or 4 is OK, as long as you can pay the bills.
6. Max out your credit cards – all of them! Pushing your spending to the limit of your credit cards is a great way to ruin your credit. The higher your debt is compared to your credit limit, the more proof that you can’t control your spending and that you’re a high risk for creditors. People who are not looking to wreck their credit keep their debt to credit ratio low, which can actually help your credit score!
7. Close your long term credit accounts. The length of time that you hold credit accounts in good standing can positively affect your credit score, since they show that you are responsible. Even if you don’t use accounts, keeping them around can actually help your credit score.
8. Apply for multiple credit cards at once. Creditors consider this “abnormal behavior” and a surefire sign that you are a credit risk. In addition, these credit card applications cause you to have a credit inquiry on your credit report. It is possible for each of these credit inquiries to make your credit score go down! This means that if you pick up a few store credit cards because you get discounts on purchases, you could actually be causing your credit rating to plummet! This is different from inquiries for mortgages and car loans – if you are looking for those types of loans, multiple credit inquiries within 14 days can only make your score go down once.
9. Pay only the minimum credit card payment. Better yet, pay only half of the minimum payment! Paying the minimum amount shows creditors that you are overextended, and can reduce your credit score. As an added bonus, paying as little as possible on your credit card debt ensures that the credit card companies make as much money off of you as possible, as you continue to pay interest on your original purchase years after you bought it.

It is probably too late for Bush to turn his political fortunes around, but it is never too late to work on building your personal fortune. A strong credit rating is an important component. Please share your experiences with your credit rating or add any comments that you think would be helpful to others.

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Sick of having your complaints ignored, being ripped off and getting the short end of the stick?

Here are 52 great sites, services and secrets to help shoppers, road warriors, home owners and all types of consumers. There are tips on how to complain effectively, protect your privacy, talk to a real person, get free stuff and fight back when the system is unfair!

How to Complain (and Get Results!)

• How to write a complaint letter – Tips for writing letters that get results, regardless of who you need to complain to.
• Sample complaint letter templates – This includes a general letter of complaint, a complaint letter about goods you have bought and a complaint about a service provided to you
• A Guide to Fighting Back – A well done guide written by the Consumerist.
• Complain to the Federal Trade Commission for any consumer complaint except:
  • Do Not Call list issues: use this form.
  • Identity theft issues: use this form.
  • Issues involving a non US company: use this form.
• For Airline Complaints contact the Department of Transportation with this form, since that’s who the airlines listen to! The Wall Street Journal reports that: “airlines admit they do pay more attention to consumer complaints if travelers send them to the DOT, which categorizes and tallies complaints and publishes monthly rankings of airline performance.” You can also email the the DOT at: airconsumer@dot.gov or call 202-366-2220 where complaints can be recorded.

How to Talk to a Real Person (or to Stop Them From Bugging You)

• Dial A Human – Press 1 if you are sick of talking to a robot! Dial A human is an exhaustive list phone numbers and instructions on how to reach a real person at hundreds of companies.
• Hard to find 800 Number - Can’t find a phone number for Amazon, Ebay or Microsoft? Here is a handy directory of some of the more difficult to find toll free numbers.
• 800 Notes – Gotten a call with Unavailable Caller ID info? Then the caller did not leave a message, now you can type the phone number in here and find out who is using the number and how. A really handy tool to research and report annoying phone calls.
• Catalog Choice – A free service that allows you to save natural resources by deciding what gets in your mailbox. Consumers can indicate which catalogs they no longer wish to receive, and businesses can receive a list of consumers no longer wanting to receive their catalogs.
• The National Do Not Call Registry – Stop telemarketing calls at home. Most telemarketers should not call your number once it has been on the registry for 31 days. If they do, you can file a complaint at this Website. You can register your home or mobile phone for free.
• FCC Junk Fax Complaint Form – You may use the FCC Form 1088 to complain about: Telemarketing issues, i.e., (1) junk faxes, (2) telemarketing (including Do-Not-Call violations), and (3) other issues, such as pre-recorded telephone messages, automatic telephone dialing systems, and unsolicited commercial e-mail messages to cell phones, pagers, and other wireless telecommunications devices.
• How to block your caller ID – Keep your number to yourself. Important note: Calling Toll Free numbers (800, 888, 877) your phone number is available to the party you call even if you have blocked yor caller ID though an alternate system know as ANI.
• How to Reject Anonymous Calls – From most land lines, dial: *77 to enable it and *87 to disable it. Incoming callers who call you when you have Caller ID blocking on hear a message stating that this line does not accept calls from anonymous callers. This service is usually free with Caller ID on land lines. It is not available from most cell phone services.

How to Research Companies (or Take Your Complaint Public)

• The Consumerist – A widely read blog which has made its name by reporting on stories where consumers have been wronged.
• The Better Business Bureau – A resource to research companies and charities, as well as a place to file a complaint. Because of the high profile of the BBB and their frequent use by the media, companies tend to work hard to address BBB complaints.
• The Rip Off Report - A consumer reporting service, by consumers, for consumers, where you can publish complaints about companies or individuals.
• Complaints.com – A database of personal, first-hand, consumer experiences (well bad experiences anyway) with products and services. Learn from the experiences of others, or educated them with your own complaints.
• Guide Star – The leading source of information on U.S. nonprofits. The site has a searchable database of more than 1.7 million IRS-recognized nonprofit organizations and is the best place to research a charity before making a donation. (You must register for free to get access.)

Free Stuff and Services (Why pay when you can get it free!)

• AnnualCreditReport.com – The official service provided by the three credit bureaus (Equifax, Experian and TransUnion) for consumers to request and obtain a free credit report (once every 12 months) from all 3 companies. They must provide this in accordance with the Fair and Accurate Credit Transactions Act (FACT Act). You can view and print credit reports online, and they also offer options to request reports by telephone and by mail. There are MANY sites with similar names, this is the official site and you do not need to pay to get your credit report. They may offer other services, just decline them.
• Craigslist.com – Everybody’s favorite site for free classifieds. Find a job, sell a car, get an apartment, give away your empty boxes. If you need to find or unload pretty much anything, this is the site.
• FreeCycle.com – It is a grassroots and nonprofit site where people are giving away & getting stuff for free in their own community. It’s all about reuse and keeping good stuff out of landfills. It is sort of like Craig’s list, but where everything is free.
• 1-800-free-411 – Call (or visit the web site) and get your free directory listings. It’s just like 411, but there is a brief (about 20 seconds) recorded ad before you can get your listing and of course it doesn’t cost anything.

Shopping Tools (Get a Deal!)

• Free Shipping Find free shipping items at Amazon.com, eBay and free shipping coupons for 500 more stores!
• Amazon Discount Finder – lets you search Amazon for hidden discounts and mispriced items.
• Shopzilla – A price comparison shopping tool, that let’s you check prices for the same item and many different online stores.
• Deal Locker Coupon Codes – Get online coupon codes for thousands of stores, over 20,000 online coupon codes for 5000+ stores. Never let the empty coupon code box on the check out page mock you again!
• Find Misspelled eBay auction bargains, so you will be the only bidder! This search tool lets you find typos and misspellings in eBay auctions and craigslist ads. This is a really clever technique to buy things for cheap since few other people don’t find the misspelled items.
• GroceryGuide – Find grocery sales and coupons by zipcode for many grocery stores around the country.
• Pharmacy Checker lets you compare prescription drug prices for 1,000+ medications. You’ll also see online pharmacy ratings and shipping fees so you can compare total costs.
• Priceprotectr.com – After you buy something, you can register it with these guys. If there is a price drop in 30 days (or whatever the appropriate store policy is) they will notify you so you can get your refund.
• Printable Grocery Coupons from Smart Source. No Registration or sign up is necessary, but it only works on Windows.
• Just one club card is a great tool to fix the problem of having to carry around tens of loyalty, discount, and club cards by letting you print one handy card with all your barcodes. Merchants love to create loyalty cards to track your purchases and to force you to carry around an ad for them in your wallet. Now you can put your wallet on a diet by printing all of your various supermarket and loyalty cards on to one thin piece of paper.

Major Purchases (Don’t get ripped off buying a house or a car)

Buying a House

• Check Zillow.com to get an estimate of the value and to see what the house has sold for in the past.
• Check BankRate.com to see what the most competitive mortgage rates available are.
• Lending Tree will connect you with 4 lenders that know they are in a competitive bid situation, so you have a better shot at getting the best deal.
• See the Motley Fool’s guide to shopping for a loan and this list of things to know when getting a mortgage.
• If you are an experienced buyer and you are willing to do some of the leg work on your own, you can save with real estate agents that rebate you a portion of their commission like: RedFin and Zip Realty.
• Previously listed was AnnualCreditReport.com where you can get your credit report for free.

Buying a Car

• Edmunds.com can help you find out what a dealer’s invoice price is on a new car, as well as appraise a used car. They also published Confessions of a Car Salesman, a very entertaining 9 part series written by an Edmunds employee about what he learned undercover. It is very insightful, but it is a long read; you may just want to skip to the conclusions.
• If you have a problem with your new car be sure to check your state’s Lemon Laws.

Buying Electronics

• CNET Reviews – Extensive reviews of cameras, laptop, cell phones and TVs that can be very helpful.
• Steve’s Digicam – The most detailed and helpful Camera reviews to be found anywhere on the web, including an excellent “Best Camera List”.
• Epinions – Reviews on electronics (and tons of other stuff). Reviews are by regular users, so you may need to read several to get a complete picture, but a useful resource.

Crime Fighting (Because Crime Shouldn’t Pay)

• Steal-It-Back Property Recovery Service – A site that auctions unclaimed property from law enforcement in the United States. They offer a free nationwide registry for recovering lost or stolen goods. Create a free account and start logging your serial numbers. (or better yet log your serial numbers at home, and only add them to the site once stuff is stolen).
• JustStolen.net – Created by police officers in Boston to help the police return recovered property to its rightful owner. They provide consumers and business owners with a place to safely record serial numbers and valuable information about their belongings. When lost or stolen property is recovered law enforcement agencies worldwide can consult the database to identify the rightful owner. They also list items recovered by the police, where the police have not found the rightful owner (though all the items seemed to be from Boston).
• Minimize the risk of identity theft – Tips from the FTC and find out how to recover if you have been a victim.
• Six Online Shopping Scams – Online shopping is very convenient but be aware of some common scams: Missing Auction Items, Free Stuff, Phony Payments, Secret Signups, Phishing Sites, Counterfeit goods.

Travel Tools (Travel smarter!)

• Seat Guru – We all know middle seats suck, but now you can get detailed information about which seats are the best on any plane, including specific comments denoting seats with limited recline, reduced legroom, mis-aligned windows, In-seat power port locations, Galley, lavatory, Exit Row and closet locations.
• Flight Stats – Wondering if your flight will be on time? Sick of being misled by the airlines? The WSJ’s awesome travel column the Middle Seat tested all the airline services and several others and picked Flight Stats as the best!
• United Airlines promo sign-up tool – The tool will automatically sign you up for any United Airlines promotions. You just enter your United Advantage number and every day it checks for new promotions. When it finds one it signs you up. This way you’ll be sure to get whatever bonuses they offer with out having to check back. One caveat: Signing up for an offer multiple times OR signing up for offers in a specific order may hurt you (a lesser offer may take precedence over a better offer). This tool uses no prejudice – it signs you up for everything in the order in which the results are found.
• Trip Advisor has consumer written hotel reviews, so you can find out what the hotel is really like before you make your reservation.
• Kayak.com lets you search 100+ airline and travel sites in one easy interface to find the best deals.

Other Useful Sites (but you Need to Pay for Them).

We love free services, but there are some sites that require subscriptions and are worth it:

• Angie’s List is a subscription based review site for contractor and home repair and maintenance workers. As a member you can research and find vendors as well as file reports on your experience.
• Consumer Reports is the original unbiased and objective reviewer. It is a great tool, but you have to pay since they refuse advertising.
• Zagat Restaurant Reviews is a professionally edited restaurant review guide based on consumer’s own reports about the restaurants. It is a great place to look for restaurants in new cities (and you’ll get a free copy if you fill out your own report.)

Help us make this the best resource possible and leave a comment with an tools we have missed!