Everyone’s seen the television commercials claiming to get mortgage lenders competing for your business. Is refinancing your mortgage using a company with an advertising budget as large as Lending Tree a good idea? The answer to this question will surely surprise you.
Take a look at Lending Tree’s website and you’ll find a link at the bottom of the page called “Licenses and Disclosures.” About halfway down the page in the midst of Lending Tree’s legaleze is a statement required by the Attorney General of Massachusetts in big black type. I’m going to quote a portion for you.
“LendingTree, LLC is not charging you a fee to arrange a mortgage loan from the mortgage Lender. If you choose the traditional LendingTree, LLC path, LendingTree, LLC will be receiving a fee of up to $1,300 from the Lender for arranging this loan. The amount of this fee will be disclosed to you on the Good Faith Estimate you receive from the Lender you select.”
Here’s the problem in plain English. Lending Tree claims they are not charging you a fee for using their site; however, they receive a fee of $1,300 that you have to pay. Hold on a minute, they’re not charging you the fee, but you still have to pay it to them. This type of corporate legal speak is known as a “Computerized Loan Origination Fee.” Are they being honest and up front about this fee? Absolutely not, and this is why the Attorney General of Massachusetts requires this statement in big bold letters as a condition of doing business in that State.
Unfortunately, the problem of Computerized Loan Origination fees is not limited to Lending Tree. Most of the mortgage sites you find on the Internet have absolutely nothing to do with mortgage loans and exist only to collect your personal information so it can be sold to mortgage lenders. There’s nothing wrong with mortgage lead generation until a company like Lending Tree passes their fee on to you. You can learn more about refinancing your mortgage while avoiding costly mistakes like Computerized Loan Origination fees with our free mortgage tutorial.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
