Reprinted by permission of Ray Abernathy. Ray's website is available at: http://www.rayabernathy.com
This morning I was searching for an AP article, which I found posted at Yahoo Finance. After reading the story, I thumbled across a “sponsored result” at the bottom of the page: No closing costs refi. No points. No credit report or processing fees. www.countrywide.com. Amazed that this defrocked sub-prime lending giant could still be making such offers, I decided to investigate. In the process I found a way that anyone with access to the internet can experience the pleasure of protesting such shenanigans (skip to final paragraph if you don’t want to endure my foreplay).
I clicked on the “sponsored result” button and it carried me to a Countrywide page where the offer was restated: No closing costs** Home Refinance Loan. Call now 1-800-590-8042. To get started, just fill out this short, one-step form. Being nobody’s fool, I decided first to check out those two asteriks, which I’ve learned through experience as a crack adman myself usually mean, “Here’s what we are forced to say because of laws and regulations that interfere with the free market and prevent consumers from getting really good deals.” The ** footnote said: Affects pricing. Some up-front fees may apply that are credited back at closing. Borrowers who choose to pay lender fees and closing costs up front may qualify for a lower rate. Refinancing or taking out a home equity loan or line of credit may increase the total number of monthly payments and the total amount paid when compared to your current situation (honest, I’m not making this up).
What the footnote means, of course, is that there are no closing costs and no points on refinancing because Countrywide is willing to hide them for you, or entice you with a lower interest rate if you pay the fees up front. Actually, I decided to ignore these obvious trangressions of truth because my irises were still dancing on the second half of the original come-on teaser — No credit report or processing fees. I’m in a bit of a jam, you see: because of the sub-prime lending crisis and its rippling consequences, I’ve probably lost about 15 percent in the value of my home and also 20 percent of my 401K (that was before today, a Monday when the bears always dominate the stock market). So I said to myself, “What’s more to lose except my pride,” and went ahead and tried to fill out the refi application form online.
The first question under “Home Loan Information” asked for the purpose of the loan. I tried to type in “To pay my part of the tab for the economic collapse triggered by Countrywide,” but the blank space wouldn’t take it and so I had to settle for “Unsure/Other.” The next space asked for my current home value, and since I’m not sure, I selected $1-$10,000, which is probably a little exaggerated, but whatever. Then I entered my mortgage balance, which is about $180,000, clicked on “residential” for “property type,” and tried to enter a reasonable figure under “additional cash needed.” Somehow, the input mechanism misfired and recorded my answer as $2,500,000,000 instead of $25,000, but since I knew there would be no credit report required, I said to myself “who knows?” and filled out the contact information section, then punched the “submit” button.
Here’s what came back: Thank you! Your information has been submitted. Based on the generalized information you have given us, Countrywide Home Loans does not appear to offer a loan program that fits the situation you described. Please do not consider this a credit decision, as we did not verify any of the information you provided. If you call and provide more specific information, you may be able to speak with a Home Loan Consultant today.
I still haven’t figured out the meaning of contextually relevant, but I was instantly down on clicking through to the Countrywide page …. and clicking through to the Countrywide page …… and clicking through to the Countrywide page. Quickest way for others to participate is to Google “refinancing” and click on the Countrywide ad under “sponsored results” at the top of the first page. Every little click helps.