shocked look on mans face

Shocking Lies that Loan Officers Tell

Why Do Loan Officers Lie?

Statistically speaking, the volume of lies that loan officers tell readers of this site is staggering.

This website primarily exists to help people that have hurdles to overcome, or complicated situations that require a specific area of expertise and understanding of the underwriting guidelines to navigate.

It makes sense that most of the visitors to this site have these nuances that make put them at a higher risk of receiving misinformation about how to resolve their situation.

If these are the lies that we know about, the odds are that there are many, many more consumers that are being told lies to cover up a loan officer’s lack of experience, or ignorance of underwriting guidelines.

My hope is that what you take away from this is that just because you speak to a “so called” professional, it doesn’t mean that they are an expert, or a good person that is just trying to help.

Below are four examples of recent comments I’ve received on the website that just shocked me.  It’s not that they were lied to that shocks me, it’s the fact that the loan officer tried to pass it off as something that was outside of their control.

Luckily, these folks found this website, and I was able to clear up the confusion around the lies they were being told about their options.

Loan Guidelines Don’t Suddenly Change

Loan officers claiming that the guidelines changed is probably the most common “cover-up” that is communicated by loan officers that lie.  Here are a couple of recent examples of how these loan officers try to cover up their mistakes through their lies.


We were pre-qualified for a loan with 10% down.  We made an offer on a house.  After our lender stopped taking our calls for a few days, last week we found out they changed it to 15% down.

– Becky


This particular situation is someone applying for a portfolio loan.  There are not many options currently for portfolio loans.  I can tell almost immediately what kind of loan, or lender a reader is talking to based on what they are being told.

It is incredibly rare to find a portfolio loan that only requires a 1o% down payment.  In this situation, the reader told me their timeline and credit scores, which I knew immediately would prevent them from qualifying for a portfolio loan with a 10% down payment.

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Well, that didn’t stop this loan officer from covering up their mistake by telling these home buyers that the guidelines changed suddenly during the several days that they refused to answer any phone calls or emails.

IBR Payments On Credit Report

Here’s another one:


My lender said that currently Student with IBR payments are currently in the “Closed” status.  This keeps changing and is currently on Trumps “to-do” list to switch back to allowing the IBR payment that shows on your credit rather than the 1%. But I see you’re telling people they can do that now.

Now I’m stuck until Trump gets the Bill to change, AGAIN!

– Susan


This one is goes on the top of my list for the biggest load of bullshit I’ve probably ever heard come from a loan officer.

There is no such thing as a “Closed” status on student loans.  I’m not even sure what that means.  I promise you that the President of the United States does not have a “to-do” list that includes allowing IBR payments to show on your credit rather than use 1%.

I’m struggling right now to not unleash a barrage of expletives that more or less could be deciphered as shock and awe as to how this person is even employed by a lender.

Here’s the truth.  The student loan guidelines were updated in 2015, and have not changed since then.  There are options for homebuyers that have IBR (income based repayment) payments on their student loans.

Guidelines DO NOT change while you are in the process of getting approved.  Most underwriting guideline changes are announced months before they go into affect.

Bad Loan Officers

More common are the loan officers that give bad advice based on a complete lack of understanding of what the truth is.  These are perhaps the most dangerous lies of all because they sound so convincing.

The only possible explanation for these types of lies is simply that the lender they work for has instituted overlays to the underwriting guidelines and have chosen to not follow the guidelines of the loan program you are applying for.

I’m not sure why these loan officers are so confident in their answers, but they sound like they know what they are talking about!

Let’s take a look at a couple of examples:


I was told by the lender that i would need to be on a fixed plan to lower my debt, which will guarantee approval. However, I won’t be able to afford the payments on a fixed plan.

– Christie

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This one falls into the same “truth” category as the reader that was told that the President has her specific challenge on his “to-do” list.  This is misinformation that could be the result of a conscious decision by the lender, or ignorance by the loan officer.

Uninformed Loan Officers

This one only qualifies as a lie if the loan officer knows better, and is trying to cover up the decision that their employer has made regarding underwriting these scenarios.


Hi Scott,

I lost my home because of a job loss in 2007. I could not sell the home because if was underwater with the housing crisis. I declared bankruptcy in 2008 and the home was included. We filed all paper work to provide the home was returned to the bank without contest.

The foreclosure did not occur until 2011. Now, 6 years later lenders are telling me that while I meet all criteria for the loan (no credit report issues except the bankruptcy, more income than required, etc) that they cannot write a loan because it has not been 7 years since the foreclosure.

Your site indicates, the 7 years should be waived because the foreclosure was part of the bankruptcy?

– Julia


I have challenges with this one because I know of several major banks that have chosen to not follow Fannie Mae guidelines for mortgages that were included in a bankruptcy.

If the loan officer read the underwriting guidelines, they would know that they are lying to the home buyer.  If they are simply saying what their employer told them to say, then they are guilty of not telling the truth.

Why is it so hard to help folks by telling them that yes, it can be done, but I cannot do it.  I do this all the time.

So that’s the end of my rant.  I don’t make this stuff up, but I have made slight edits to the above comments to keep personal details and identifying information out of the text.

Signs Of A Bad Loan Officer

Though most loan officers are good at what they do, unfortunately, there are some bad ones. And though you cannot always tell in advance whether they’re going to be good or bad, here are some signs of a bad loan officer – one who is not fully working on your behalf.

  • Loan officers who lie to you

There’s no excuse for a loan officer to lie to you. If they tell you something that doesn’t sound right, do some investigation, or better yet, just speak to one of the Experts on the website – we’ll always give you the straight scoop.

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  • Loan officers with too good to be true promises

Some lenders may be more aggressive than others and offer a slightly lower rate to get your business. But if you find one (usually they’re calling you as a result of your filling out a form online) promising huge discounts on rates, telling you your credit score doesn’t matter, assuring you you’ll definitely get approved but you have to apply right now, they’re probably lying to get your business.

  • Uncommunicative loan officers

If you’re leaving them voicemails and emails, but they’re not responding, day after day, there’s a problem. You need a loan officer who cares about you, wants to answer your questions, and who, if there are problems, wants to help you quickly resolve them to get your loan back on track.

  • Lost paperwork, emails not received 

It’s understandable that things sometimes get lost. But if it’s happening repeatedly, they need to be replaced.

What Should You Do If You Have A Bad Loan Officer?

That’s a tough one, especially if your loan is well underway. Do you ask for a different loan officer or cancel the whole process and move to a different lender?

Since every situation is different, here’s what I suggest – submit a question or leave a comment below – as experts in the mortgage business, we’ve seen lots of situations and can usually give you good advice for your next step. We’re always willing to help!

Have Questions About Bad Information or Other Mortgage Issues?

We can help! You can Ask Your Question here and we will connect you with a Mortgage Expert in your area that can help, or you can find a Mortgage Expert Near You below this article.

About the Author

Scott Schang

A 20+ year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues and making sense of complicated real estate and mortgage topics on this website since 2007

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  • Mikayla says:

    Was told by our loan officer that we qualified for a first time home buyer grant to cover our closing costs during our negotiations with the seller. Because of this, we agreed to cover closing costs in full. Turns out if you are buying more than 5 acres (which we are) that you don’t get that grant. We found this out less than 10 days before closing, and our lender proceeded to suggest we take out a separate loan with him for the closing costs if we couldn’t come up with the money.

    Pretty sure our loan officer is either incompetent for not knowing we couldn’t get the grant, or trying to scam us into taking an additional loan. Not sure what we can do about it at this point without losing the house completely. We will probably go forward and refinance with another lender at a later date just so that we don’t lose the house. This is in Ohio for reference, and it is a VA loan.

    • Scott Schang says:

      Mikayla, so much of this doesn’t make sense. Your loan officer should have paid attention to the qualifying guidelines for the Grant, or he had you approved for a property that was not over 5 acres initially and didn’t think to review the guidelines when you made the offer on the 5-acre home. Also, I don’t know of any loans that you can take out to cover closing costs that are acceptable to VA. The only option would be to increase the rate to generate a closing cost credit to cover closing costs. If you have not closed on this loan yet and would like a second opinion, please shoot me an email to scott@findmywayhome.com

      THANK YOU for your service! I hope this helps?

  • Frankie says:

    I was in the underwriting stage of my loan process and was told that kind of loan my lender selected was not correct. Then the lender told me they withdrew the loan because I waited to long to get appraisal. I spoke to the lender on the 2nd of june and they advised we had 24 days to get the appraisal and got the appraisal done on the 9th of june.

    • Scott Schang says:

      Hi Frankie, this is a little confusing, but it sounds like your loan officer didn’t do something correctly? If you would like a second opinion, or have to start over – I can introduce you to a loan officer who will not make mistakes like this. Feel free to email directly at scott@findmywayhome.com and let me know what State you’re buying in.

      I hope this helps?

  • Thomas says:

    My mortgage loan officer Robert s Stevens from rocket mortgage has lied to me repeatedly he asked on three separate occasions that the seller was just a family friend and not related and said the terms we got were possible because they weren’t a relative now the teems have changed drastically for the worse and he’s saying it’s because we aren’t actually related the interest rate also changed even after we locked it in he has only had contact with my cobuyer since i pointed out a lie of his he is worse than a scummy used car salesman

    • Scott Schang says:

      Thomas, I’m so sorry to hear about your experience. Unfortunately, it’s probably not Robert’s fault entirely. These big companies do not hire experienced loan officers. There is no such thing as a higher interest rate if you know or are related to the seller of the home. The best way to avoid these experiences is to make sure you’re working with a professional, that has years of experience. Look up your loan officer on the national licensing site – https://nmlsconsumeraccess.org/ – see how long they’ve been in the business. If they have only worked for large telemarketing companies like Rocket, find another loan officer.

      I hope you were able to complete your purchase. If you have not yet completed it, and would like a second opinion from an experienced professional, let me know! You can use the form here on the website, or your can email me directly at scott@findmywayhome.com

      I hope this helps?

  • Terrie says:

    Hello, I was emailing a bank manager that I have a home equity loan with about redoing the loan at the same interest rate and she spoke with her supervisor and stated they would agree with the percentage and the loan for 10 years. When I went in to sign the papers she stated that it was for 5 not 10 years even though I have all the emails stating to the interest rate and 10 years, not 5. She is a branch manager so I would assume she knows what she is doing. Can I do anything about this since it was the branch managers mistake?

    • Scott Schang says:

      Hi Terrie, it sounds like there was either a miscommunication or she doesn’t know her own guidelines. I agree that you would assume she knows what she is doing, and you would be shocked at how many people in this industry are willing to say things that they really don’t understand.

      I don’t think there is any recourse other than shopping around other banks for better terms. It sounds like a mistake, not a malicious attempt to trick you into a bad loan.

      I hope this helps?