• Some mortgage tricks are as simple as hiding an ace in a poker game.playing cards tricks focuses image by Alexandr Shebanov from Fotolia.com
  
  Like salespeople in any retail business, mortgage loan officers can be capable of luring borrowers into products they didn't intend to purchase in the early stages of their loan applications. Although laws against mortgage trickery and fraud are heavily enforced, there are still lenders and brokers able to hoodwink certain borrowers. Some tricks are easy to spot, while others are more subtle.
  
  

Bait and Switch

• A common trick in the mortgage industry is a classic bait and switch technique. Borrowers are often quoted low interest rates on fixed loans, which lures them to complete applications. However, dishonest loan officers know the low rates quoted are on adjustable loans. This fact is some times not disclosed until closing. Borrowers are sometimes not aware they are stuck with an adjustable rate mortgage until they begin receiving statements from their lenders.
  
  

Hidden Points

• Some borrowers, especially first-time home buyers, are often not aware of how mortgages are structured. Some loan officers prey upon this sector by advertising rates lower than other lenders in their market. Lenders rarely disclose that they make the most amount of money by selling highest interest rates. In order to profit from loans with low interest rates, lenders must charge borrowers upfront fees. These fees are known as "points." One point equals one percent of a loan amount. The trick involved in charging points without borrower knowledge comes with incorrectly explaining the charges, disguising them as "standard fees," or not disclosing them until late in underwriting process, when borrowers are unable to cancel their loans.
  
  

Lock Fee Tricks

• Lock fee tricks are common with dishonest mortgage brokers who charge their borrowers fees to lock interest rates. Because brokers know they get paid more from wholesale lenders to sell higher rates, locking at a low rate when a borrower wishes to do so can result in reduced broker commissions. The trick is for the broker to charge lock fees, yet they do not lock the rates. It rates do not increase, brokers pocket lock fees and the premium from the wholesale lender.