AgentMortgage

Real estate loan warranty may be a scam

Mortgage Professor calls return on investment claims 'ridiculous'
Published on Jul 19, 2004

"Under the Loan Warrantee Program offered by DFF International, you pay a fee of 17 percent of your mortgage loan upfront, and in 60 months they cut you a check for the original loan amount. If you pay a fee of 25 percent of the loan, they cut you a check for the loan amount in 36 months. Can this be on the level?" No possible way! They tell you that if you take out a new mortgage loan for $200,000 and pay them $34,000, they will pay you $200,000 in five years. That's a return of 42.5 percent a year. If you pay them $50,000, they will pay you $200,000 in three years. That's a return of 58.7 percent a year. How can they earn returns this large? Indeed, they have to be even larger if they are going to make a profit. On their Web site, they associate themselves with hedge funds, insurance companies and other sophisticated investors who can earn large returns. But none of those entities consistently earns anything like the returns promised by the Loan Warrantee Program (LWP). "...Is thi...

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