- The Washington Times - Wednesday, July 16, 2003

During a real estate buyer’s market, you’ll see all sorts of crazy offers being put out there by sellers. I’ve seen homes marketed with vacations, cruises — even a Mercedes Benz.

The mortgage industry seems to be entering that same sort of phase. As if the lowest interest rates in more than 50 years aren’t enough to draw more homeowners to refinance, lenders are making deals with credit card companies, airlines and trade associations to get your attention and your business.

Take this latest offer I received by e-mail from American Express. I actually requested to be on its list, so this was not spam. I’ve been impressed by the company’s customer service. However, this offer confused me.

“Dear Cardmember: When you get a mortgage or refinance your home with Mortgages from American Express, you’ll not only get the guaranteed best price, you can also earn 1,250 Membership Rewards Bonus Points for every $10,000 in booked mortgage value. There’s no limit to the number of bonus points you can earn.”

Now, being a card-carrying American Express Rewards Bonus member, I had to move immediately to the fine print. Here’s the next statement I read:

“American Express does not solicit, offer, endorse, negotiate, or originate any mortgage loan products, and is neither a licensed mortgage broker nor a licensed mortgage lender.”

Uhhh — wait a minute. First they say, “When you get a mortgage or refinance your home with Mortgages from American Express ….” Then they say, “American Express does not solicit, offer, endorse, negotiate, or originate any mortgage loan products …”

If that’s not confusing, what is?

Actually, the potential loan you would receive is being offered by New Jersey?based PHH Mortgage Services, which apparently has worked out a marketing agreement with AmEx to use its name in its loan promotion, plus give AmEx members extra Bonus Points.

Offering bonuses such as this with mortgages is nothing new — it just has taken on a new hype with the low interest rates and the high-speed marketing of the Internet.

In fact, just as I was writing this column, I received an e-mail from a sales rep from American Airlines:

“American Airlines has a new partnership with Wells Fargo Home Mortgage. AAdvantage members using the Wells Fargo First Class Home Financing program will receive 1,000 AAdvantage miles for every $10,000 of loan amount on a new purchase or refinance, with no limit on the number of miles that can be earned. Soon, home equity loans will be applicable, too.”

It’s creeping up everywhere, it seems. Even United Airlines and the online mortgage advertiser site LendingTree have an agreement, according to this sales rep.

It’s not just the mega-billion-dollar companies making such offers. Access National Mortgage, a medium-size company based in Virginia, for instance, teams up with companies and associations to offer members and employees quarter-point credits at the table as an added benefit for association membership or employment.

Lenders are going after your business, whatever it takes. They know that with record-level interest rates, consumers are looking deeper at their offers — even deeper than points, fees and interest rates. If you can find two mortgage companies that offer the exact fees, points and interest rates — but one is willing to send you on a cruise as well — why not go for the extra benefit?

Be sure to inspect the fine print with a magnifying glass, however. Some companies offer premiums for using their services, such as a trip to Disney World, but then bump up enough fees just to pay for or subsidize the offer.

Compare the good-faith estimate, which all mortgage providers are required to provide, and see what is being charged for legal services, copies, delivery, document preparation, etc., to ensure you’re getting the true bottom line.

M. Anthony Carr has written about real estate for more than 15 years. Reach him by e-mail ([email protected])

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