It was around 7 pm on a Tuesday evening. I had just walked in the door from a 12 hour duty day. The phone rang, I noticed the number that was calling was one that had been calling me (missed calls) ever since I had my telephone connected. I decided to answer.
The voice on the other line revealed it was a telemarketer when there was a pause from the dialer then the person on the other end of the line could not pronounce my name correctly. My normal practice is to hang up on telemarketers but not always, I was once a telemarketer myself before going into the military and it is NOT an easy living. So I decided to listen to the spiel and thought, eh, what the heck. We set the appointment for the salesman to come over the next day and WOW... They enticed me with a 3.50% rate, which is sounded great. But I knew there had to be a catch.
Sure enough, when Richard Brown arrived, he presented the company information and then said he was going to 'run my numbers'. I was immediately suspicious when I asked if he was going to attempt to sell me an ARM loan, and he rebutted that it is a Hybrid. Ladies and gentlemen, call it whatever you WANT—but if the rate adjusts—EVER—for the duration of the loan—IT IS AN ARM (Adjustable Rate Mortgage). He told me that the rate would be based on the 1 yr Weekly Avg Yield of the US Treasury, 2 points after the initial 36 months fixed rate period of 3.50%, with a 1 point adjustment cap. He said that the current 1YWT (acronym for the index named above) was 0.36%. So, more or less, the 1YWT can not decrease much more than it already is. So that means that any rate adjustments will go only ONE direction—AND that is UP.
I asked about points and closing costs, he assured me there would be nothing out of pocket. So, I know banks have to make thier money somehow, the only other way would be to roll those costs into the loan amount. After I asked exactly how much that would be, he did not give me a precise figure. He said that he was selling a new loan program approved by congress in 2009 but his supervisor said it was 2003. I asked him to remove me from the calling list and excused the salesman from my home.
This company DOES prey on veterans and military personell. They make it sound like they are helping but TRUST me they are only helping THEMSELVES, not you or me the veteran. This company would have made me go even DEEPER into debt to refinance with them, then in 36 months began raising my rates to eventually surpass the 5.25% rate I am already getting. When the supervisor and salesperson found out that I was once an ARM loan specialist for a very well known and well reputed mortgage company prior to my military career, and that I was not going to fall for thier moneymaking scam, they were gone. I will make sure that EVERY soldier that I ever mentor financially or counsel about purchasing a home will be warned about these crooks.
0 comments