The Banks and Lenders are Lying To Us, I've Seen This Movie Before

I HATE being lied to, especially by someone who lied to me before. It's happening again, and I have seen this movie already.

Rates this week increased again, closing at 6.35% which is the highest since 2008. They had gone over 6% in June, returned below that market, but this week again jumped up to 6% then closed at this new period high.

Yet, the news is reporting that mortgage rates cross 6% for the 1st time since 2008 this week. Not just some news, but the New York Times, CNN, Forbes, CBS News, Axios, Bloomberg, NBC, and more.

What?

As I have reported previously, the real estate industry news ALL reports on a fake number which si the Freddie Mac survey. This number is the result of a weekly survey done by Freddie Mac lenders. Those that respond to the survey report their numbers from one Wednesday to the next Tuesday are totaled and reported the next Wednesday, so some of the data is a week old, some lenders don't respond to the survey causing other variances, yet this is reported by the news as the market rather than the actual rate. It would be as if you survey stock brokers every Tuesday on the price they bought customers' Apple stock and then on Wednesday report THAT as the price. Ridiculous, who would pay attention?

The difference can be 0.25% or more.

In illegal gambling, this is called past posting. It was made famous in the classic movie "The Sting" where two scam artists got a victim to gamble on races that had already been run to trick him into betting.

So, why does the mortgage industry mislead its clients? I don't know, and I am NOT a conspiracy nut, but the facts are clear.

Here's another example.

Bank of America got a lot of free press a few weeks ago when they announced their new zero down payment zero closing cost loan targeting minority communities. 

Targeting is the correct term. I mean, how can this go wrong? Bank of America is making loans to people who so barely can afford their current life that they cannot save even 3% for a down payment, they are going to encourage them to move into their new home which is typically more expensive than the rental, take on the added costs of home ownership, and they have little to no savings as a cushion. Additionally, they are targeting minorities that have little or no credit history, meaning they are typically less educated in our financial system and will not be able to borrow money in an emergency, leaving them with alternatives but a foreclosure or short sale. And BofA's partner in this is the high-brow-sounding Neighborhood Assistance Corporation of America (NACA), the same organization that Bank of Ameria used to high behind when they foreclosed and did short sales in the last cycle.

Also back in 2008? Hmmm. 10 years ago Rolling Stone Magazine calls Bank of America "Too Crooked to Fail."

In truth, Bank of America is no more crooked than the other banks or the regulators that allow this to happen. Just make sure when you see them cheating others you understand that they are also attempting to or actually are cheating you, too.

--
Bill Gross, The LAProbate Expert
I am a real estate broker in Los Angeles, CA focused on probate real estate and the leader of a team of over 1,100 agents nationally probate experts.

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