The majority of loan officers work for legitimate companies and have built their careers by helping borrowers achieve their dreams, like owning their own homes. These people are honest and, speaking personally, hard-working in their endeavors.

All of us are appalled at the dramatic shift that has occurred in recent years where a large number of new lenders have popped up, many whom are not constrained by the requirement to be honest. Their employees go to work every day with the express purpose of deceiving consumers into doing loans with them, lying about the terms of the loan so as to induce the consumer to apply with them.

Many of these operations are "boiler-room" lenders where young, inexperienced employees are fed leads, many from the Internet, and spend their days reading scripted sales pitches to unsuspecting borrowers. When I say inexperienced I mean that some "loan officers" may have been working for only a few weeks and obviously do not "know" anything. The minimum skill for getting a job at a place like this is the ability to answer the phone.

To give you an idea about how such operations work, you should spend a few minutes looking at this video clip that popped up on YouTube.

http://www.youtube.com/watch?v=CCdbv90JURI&eurl

This is not an isolated example. As I write this there are hundreds, perhaps thousands, of people doing exactly this same thing. I can assure you that such sales tactics work or these companies would not still be in business.

What should you do as a consumer? Obviously, it should start out with knowing who you are doing business with. I talked recently with a borrower who may well be talking to such a company, one that was quoting her a "great rate." I asked who the company was and she said, "I don’t know their name." Not a good omen.

My strongly held belief is that you can get a better deal and far better service from dealing with an honest, trustworthy loan officer who works for a legitimate company. You might find one in your neighborhood or on the Internet, but whatever you do, be careful and check them out before doing business with them.