One common tactic of the shady lender/broker is to ask to see the Good Faith Estimate of any other lender or broker you are working with, then tell you that he can get you a better rate and/or lower fees. Everything is great until one or two days before closing. Then "something happens." You are told your credit score dropped, or the lender changed guidelines, or rates went up before they were locked. Now, your rate and fees are as high or even higher than with the original lender or broker and you don't have time to switch back.

Another scam pulled by some mortgage companies is to force you to purchase credit life and disability insurance. This type of insurance pays off the debt if you die or become disabled.

This type of insurance is strictly optional. Purchasing this type of insurance will not affect your loan approval. Purchasing this type of insurance can add considerable costs to your loan.

If you are being asked to pay several points, but you aren't getting a lower interest rate in return, you could be working with a shady mortgage broker.

For example, you are paying 5 points, you have decent credit, but you are still paying an interest rate that is above the market average.

Any reputable lender should be willing to give you any of the numbers they quote in writing. Actually, by law they are supposed to give you a copy of a Good Faith Estimate, and Truth In Lending Disclosure within three days of your application. Failure or unwillingness to do so may be a red flag.

If you have some questions or problems with your mortgage loan after closing on a refinance loan and your mortgage lender or mortgage broker does not return your phone calls while you are still in your 3 day period of rescission, you may be working with a shady or unscrupulous mortgage broker/lender. This is a tactic that has been reported by consumers after they have closed on their mortgage loan and they are unable to contact their loan officer to ask questions, request further information about their new mortgage loan, or to rescind on their mortgage loan. Take note that you can rescind your mortgage transaction if you are not comfortable with the mortgage loan or you do not trust the loan officer that set up the loan by contacting the title company or attorney that handled the closing of your mortgage loan and by placing your rescission request in writing. I would recommend notifying the actual lender, the loan officer's office, and the title company to insure your loan is cancelled in time, if that is what you feel is necessary because you are not getting anywhere with trying to contact your mortgage broker/lender.

Another simple way to see if you're dealing with a shady lender/broker is to check their record with the Better Business Bureau. If you see a pattern of multiple complaints, and specifically unresolved complaints, you may want to look elsewhere.