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Review of The Loan Wolf

by Arnold Kling
July 14, 1996

Several of the opinions that I have expressed about mortgages over the past two years on The Homebuyer's Fair are reinforced in a book called The Loan Wolf Mortgage Guide by Randy Johnson, the President of Independence Mortgage Company in Newport Beach, California. In particular, the author and I agree that:

The author points out a number of approaches that lenders use to induce borrowers to pay higher rates for their loans. He recommends that borrowers employ an assertive negotiating strategy, and he suggests several specific tactics.

The tone of the book is very negative toward the mortgage lending business, as indicated by chapter titles like "How Lenders Make More Money Without The Customer Knowing About It." While the author is correct in pointing out that you need to be more wary about getting a fair deal on a mortgage than, say buying cereal or a toaster, it is worth remembering that mortgage lending is free of the price regulations and anti-competitive practices that exist in some other businesses. Market forces do operate, so that you can get a competitive interest rate. We would agree, however, that in order to get a good mortgage you have to work at it.

The author and I agree that "information is power," and in the case of mortgage borrowing it can keep you from getting fleeced. More information about The Loan Wolf may be obtained at http://www.loan-wolf.com.

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