In my opinion it makes no sense and may even be illegal. I know that some mtg people have done it, I want no part of it.
When people do finally realize that they got screwed, they will find a lawyer who will want to sue everyone that he can find that was involved, including the FEDEX delivery driver just so the lawyer can make his money.
The mortgage person responsible will probably no longer be in the business, they will be off in another scam.
In the securities industry it would be called churning. My belief is that it is highly unethical
and although might be a short term benefit to a borrower, it screws the borrower in the long run, without them even realizing it.
Most mortgage people do not know the meaning of the word ethical.
It’s nothing more than a mortgage person encouraging someone to gamble with their future financial security so they can put commissions in their pocket, with no regard to the clients future.
I equate it to the scheme that goes on with mutual funds, people pay a fund manager who will make money forever regardless of whether or not the client ever makes a penny.
It’s wrong. It’s sick. It’s unfortunately how many people make money, by screwing others with crazy ideas that neither one actually understands.
I always & only suggest what I think is the absolute best option for the borrower that benefits them, not a crazy loan that will benefit me.
People who shop only by rate will get what they deserve. … HLS
