Marketing Easy Credit in a Credit Crunch Environment

Online headlines scream “More trouble in subprime mortgage,” while on the same page, banner ads tout “$300,000 mortgage for $995/month,” or “Bad credit OK.” So is there a problem or not?

Amidst the brouhaha over the crash of subprime mortgage lending and the overnight tightening of credit standards for new mortgage applications (like, hello – we need your stated income actually verified), mortgage companies (even those being bailed out or reorganized), are still actively promoting easy credit.

As covered in today’s Washington Post, analysts say that mixed messages like these in the mortgage market are common. Why? Marketers have found that selling a payment and a “Getting a ‘Yes’ from us” message is easier than selling a higher interest rate.

In other words, even if the mortgage company can’t ultimately do the deal, they’d still rather be talking to and moving people through the home-loan sales funnel.

Bad credit or not, consumers can usually find some type of mortgage deal out there. What raises the ire of regulators is false or misleading claims, such as companies offering “low” rates without full disclosure that the rates could increase after a certain period of time.

Meanwhile, even with the uncertainty in the mortgage market, one thing is certain. Marketers will make sure you know that you may be able to “Refinance with a rate as low as 2.9%. Click here.”

Just be sure to read the fine print first.