An interesting article in the Atlanta Journal-Constitution questions “No-Cost Loans” and the self proclaimed originator of these types of ads.
Jon Shibly has quite literally made himself into a mortgage industry cowboy by delivering straight forward and unpolished radio ads offer “no cost mortgages”.
“His business model is simple: Run aggressive ads selling “no closing-cost loans” and man the phones. “No one delivers the message better than me; I’m the most knowledgeable,” Shibley said. “I didn’t say I pioneered no-closing cost mortgages; I pioneered the marketing of no-closing cost mortgages.”
Prior to this statement he also said:
““I read no magazines, no books [on the industry]; I listen to no economists; I keep myself involved in the market.” He stood up and leaned forward on his rough-hewn wood desk for emphasis. “I am the expert!”
I don’t know about you, but this, on a few levels, scares me. I am not so offended by the no cost mortgages ads, which are misleading to some extent, especially if the consumer is has not been educated properly on the process, but more so on the irreverence of Shilbey and his emotionally charged ads.
“Kyle Caldwell, an account manager for WSB-AM, says Shibley is a radio natural. “He speaks to the dog in the language of the dog,” Caldwell said, adding “sometimes you wince, but it’s refreshing.”
He speaks to the “dog in the language of the dog”?? “Sometimes you wince, but its refreshing”???? Really??
On what level is this refreshing?
In a recent post I discussed the need for the regulation of mortgage ads and here again is another clear example of this need.
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Advertising is such a messy area to try to condem companies from. Is Gatorade really the thirst quencher? It actually makes me thirstier, so I claim false advertising. The financial world is in such a light becuase of blatant attempts to scam people into bad deals. I know of a case where e-mails were sent out with a photo of a house with red stamp over it saying approved and the company was said to have false advertising practices. How about Re/Max ads with sold signs in front of the homes? Is it wrong to advertise what you do, what you are best at or what you attempt to do? All advertising is done with in tongue in cheek. But what do I really know, I’m only working for the “the freshest leadson the net” and I am “The foremost mortgage consultant in the industry today”
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It is disappointing to see that snake oil salesmen such as these still exist. It was easy for them back when interest rates were at 4.75%, but the fall-out has seen most of these “Cowboys,” go under. But regulation is a slippery slope. Unfortunately PT Barnum was correct in that, “A sucker is born every minute.” There will always be companies to take advantage of such suckers. The solution comes in the responsible companies doing our part to educate borrowers. If consumers know the right questions to ask, then they are less likely to fall for bad gimmicks such as these. But I don’t think it is anything that regulation can solve. All that is going to do is create more red tape.
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Just a note John, PT Barnum never actually said that. It was a misquote and it has continued to be cited as an actual quote.
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