Summary of "The David Greene Show - Mortgage Monday: What to Know to Avoid Being Scammed | Episode 67"

Podcast Information:

• Title: The David Greene Show
• Host/Author: David Greene
• Episode: Mortgage Monday - What to Know to Avoid Being Scammed | Episode 67
• Release Date: June 23, 2025
• Description: Real Talk Real Estate with David Greene dives deep into the real estate business and investing, offering unfiltered stories, insider details, and expert insights.

Introduction

In Episode 67 of Mortgage Monday, part of the Real Talk Real Estate series, David Greene teams up with Christian Bashelder from One Brokerage to educate listeners on navigating loan estimates and avoiding mortgage scams. The episode emphasizes the importance of understanding every detail in a loan estimate to prevent being misled by dishonest lenders.

Overview of the Episode

David Greene opens the show by highlighting the frequent questions and concerns from listeners regarding loan estimates. He emphasizes that borrowers often face pressure to sign loan documents without fully understanding the terms, which can lead to costly mistakes. (00:00)

Detailed Breakdown of a Loan Estimate

Christian Bashelder takes the lead in demystifying a real loan estimate, using a VA loan as an example. He meticulously explains each section of the loan estimate, ensuring listeners grasp the complexities involved.

Section 1: Loan Terms

• Duration and Type: 30-year fixed VA loan.
• Loan Amount and Interest Rate: $405,000 at 6.49% interest.
• Principal and Interest Payment: $2,556 monthly.
• Prepayment Penalty & Balloon Payment: Clearly states that VA loans do not include prepayment penalties or balloon payments. (04:51)

David Greene asks about the definitions of prepayment and balloon penalties, prompting Christian to elaborate:

• Prepayment Penalty: A fee charged if the loan is paid off early, typically ranging from 1-5% of the loan amount within the first 1-5 years.
• Balloon Payment: A lump sum payment due at the end of the loan term, common in short-term loans but absent in a 30-year fixed loan. (05:20)

Section 2: Projected Payments

• Principal and Interest: As previously stated.
• Mortgage Insurance: Zero for VA loans, highlighting one of the major benefits over FHA and conventional loans that require PMI.
• Escrow Payments: $453 monthly for property taxes and homeowners insurance, explained as a way to manage large annual expenses through monthly contributions. (06:00)

Section 3: Closing Costs Breakdown (Sections A through H)

Christian categorizes closing costs into three main areas:

1. Loan Fees (Section A): Origination charges, e.g., a flat $950 fee in this example.
2. Third-Party Fees (Sections B, C, E): Includes title fees, appraisal fees, flood determination fees, etc. Christian warns about lenders potentially underquoting these fees to appear cheaper initially but increasing them later. (15:57)
3. Escrows (Sections F, G): Detailed explanation of prepaids and initial escrow payments, ensuring funds are available for future tax and insurance payments. (28:27)

Section 4: Additional Costs

• Optional Fees (Section H): Such as owner’s title policy.
• Lender Credits (Section J): Discussed how credits can sometimes be misleading, effectively increasing future payments or loan amounts.

Common Lender Scams and How to Avoid Them

The episode delves into deceptive practices lenders might employ:

1. Misrepresented Fees: Lenders may present low upfront loan fees while hiding higher third-party costs, leading to unexpected expenses at closing.
2. Deceptive Rate Offers and Lender Credits: Promising lower rates through credits that require accepting higher rates or additional fees, ultimately costing the borrower more over time.
3. No-Cost Refinances: Offering seemingly free refinancing options that incorporate higher interest rates or increased loan balances, masking the true cost.

David Greene emphasizes the importance of understanding these tactics to avoid long-term financial strain:

“What you want is I'll replace your sink for this much money.... Rule number one of negotiating is understand how the person you're negotiating with is going to be hiding information.” (28:33)

Christian Bashelder adds:

“If you just ask what's your rate? You can get tricked so much easier than if you say what's your par rate or what's your rate and what are your fees?” (36:10)

Best Practices for Borrowers

To protect against scams, Greene and Bashelder recommend:

1. Scrutinize All Fees: Examine each section of the loan estimate, focusing on third-party fees that must remain consistent across lenders.
2. Request Full Rate Stacks: Ask for comprehensive details on interest rates and all associated fees to ensure transparent comparisons.
3. Compare Apples to Apples: Only compare loan fees (Section A) when evaluating different lenders to ensure fairness.
4. Choose Transparent Lenders: Work with reputable firms like One Brokerage that prioritize honesty and detailed disclosures.

Christian Bashelder encourages borrowers to:

“Ask the full question, get the full rate stack, bring it to a loan officer you trust and get a competitive quote, knowing that they're actually being honest.” (36:10)

One Brokerage's Approach

Christian Bashelder highlights One Brokerage’s commitment to transparency and client education:

• Honest Loan Estimates: Providing accurate, upfront information without hidden fees.
• Comprehensive Support: Encouraging clients to reach out via website or social media for personalized assistance and clarity.

Christian Bashelder states:

“This is legal for them to do this because you're looking at the paperwork and you don't know what you're reading. This is one of the things that we've committed to at the one brokerage that we will not do.” (38:04)

Conclusion and Contact Information

David Greene wraps up the episode by reiterating the importance of borrower education and vigilance in the mortgage process. He encourages listeners to engage with the podcast through questions and feedback.

Contact Information:

• Christian Bashelder:
  • Website: onebrokerage.com
  • Instagram: The One Broker
  • Email: christian@onebrokerage.com
• David Greene:
  • Website: davidgreen24.com
  • Additional Platforms: Social media and website chat options for direct engagement.

Notable Quotes with Timestamps

• David Greene (00:00):

  “This is the show where we pull back the curtain and show it to you, too.”

• Christian Bashelder (02:05):

  “We thought the listeners, the David Green show could definitely benefit from the same kind of breakdown we'll go through today.”

• Christian Bashelder (28:27):

  “It's your buffer for your property taxes and your insurance to protect you from any increases and to protect the lender from being short funds.”

• Christian Bashelder (36:10):

  “If you just ask what's your rate? You can get tricked so much easier than if you say what's your par rate or what's your rate and what are your fees?”

Key Takeaways

• Understand All Fees: Comprehensive knowledge of loan estimates is crucial to avoid unexpected financial burdens.
• Be Wary of Deceptive Practices: Recognize common scams to safeguard your financial well-being.
• Demand Transparency: Work with lenders who provide clear, detailed, and honest information.
• Educate Yourself: Empower yourself with knowledge to navigate the mortgage landscape effectively.

This summary encapsulates the essential discussions and insights from Episode 67, providing a valuable resource for those seeking to understand loan estimates and avoid mortgage scams.