In a refinance market, you have to be careful because a lot of people come into the industry at those times, a lot of companies come into the market, a lot of rookie originators come into the market that may not have the experience level you're comfortable with. People know there's volume and there's money to be made in this business right now. Refinancing or purchasing a home is usually the largest transaction a person is going to make in their lives and you don't want to be the guinea pig. Nevertheless, they can cost borrowers serious time and money, and guarding against them becomes even more important during the boom times. There's kind of a range of games that get played and they're pretty broad, from fairly benign stuff to outright fraud.
Problems can pop up long before a borrower fills out any paperwork.
Indeed, just finding out how much a mortgage costs can be confusing. Consumers have to specify all of these things or lenders can pretty much say whatever they want, then provide different figures when the customers come in and blame the lack of specificity. A loan with a lock period of just 15 days, for instance, usually has a lower rate than one that a consumer can lock in for 60 days. Most consumers opt for loans with longer locks because they need more than two weeks to close. But loan officers sometimes quote rates on their shortest-lock loans over the phone or in print just to sound cheap, knowing full well that many callers will never be able to obtain those loans.