Disturbing Mortgage Ad from ING Direct

by David Ning · 90 comments

After I posted this post, my readers corrected me in that ING Direct is actually a very responsible lender and company. I apologize for overreacting to the sub-prime mortgage.

ing directWith so many news articles about subprime loan and people being suckered into low teaser rates that ultimately reset, one would think that there wouldn’t be many ads about mortgage products that shouldn’t be sold to the general public in the first place. Today however, I got an ad from ING Direct advertising their low Adjustable Rate Mortgage (ARM) rate.

I was quite disturbed by this ad because it was these same products that got the United States into the whole housing mess in the first place. Sure, ARM is a great choice for mortgage for a small minority of people. However, no where in the ad do I see that this type of mortgage might not be for everyone. All I see is:

During the initial 5-year fixed rate period, you can save more than $8,200 in interest compared to a 30-year fixed rate mortgage. (Interest savings is over the first five years for a $235,000 loan) Start saving today with an Orange Mortgage.

If you just read this statement without knowing much else about mortgages, you would think that you are saving so much money. I don’t see anything in the ad that says what the interest rate is after it resets in 5 years, nor do I see anywhere that advises people to seek advice from professionals first because this is not for everyone (not that these so called professionals really tell you much truth judged from what’s been happening the last few years).

To make this worst, the reason why I got this ad is because I once had an online savings account with them. Did I even ask for a mortgage product pushed on me? If I was really stressed out about my mortgage payment, I might just fall prey to this ad and apply for this type of mortgage. To make sure we don’t spend enough time to research this, the ad says:

Apply by February 19, 2008 to receive One Low Closing Cost of $895.

Great.

Way to go ING Direct.

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{ read the comments below or add one }

  • Lisa says:

    I have been extremely happy with my 5 year ING ARM. The process of refinancing from GMAC in 2009 was painless and we have been saving over $5000 in interest yearly AND eliminated the need for a $126 monthly PMI fee.

    I am contemplating during an early rate renewal (“refinancing”) and adding another 7 years at a lower rate (from 3.75% to 3.304%) which will cost me about $850 BUT would save me an additonal $4500+ in the long run. Just worried the mortgage rates will drop AGAIN right after I do it!

    It is one SPECTACULAR product.

  • Ciera Ike says:

    Zune and iPod: Most people compare the Zune to the Touch, but after seeing how slim and surprisingly small and light it is, I consider it to be a rather unique hybrid that combines qualities of both the Touch and the Nano. It’s very colorful and lovely OLED screen is slightly smaller than the touch screen, but the player itself feels quite a bit smaller and lighter. It weighs about 2/3 as much, and is noticeably smaller in width and height, while being just a hair thicker.

  • Bob says:

    FWIW most banks will scarf accounts that are at their bank to pay their loan. Car loans, credit cards, all of them. Read the fine print, it’s in there.

  • Bob says:

    A lot of ppl use ARM’s as a way to get more house than they can really afford. I didn’t get all stupid with my mortgage, my loan payment is $326 with ING. I can’t find a tent for that, I’ll go mow lawns if I have to. Keep your mortgage under 2x your annual income and you will be OK. Few few foreclosures result when people start with loans at 2x their annual income or less. If you make $50k, don’t borrow over $100K.

    • M says:

      Thanks Bob. Now that is reasonable. We had a housing bubble; the banks with no regulations gave people loans for way more house than they could afford. My problem with ING is that I was lied to. When I signed up I was A paper and my house was worth way more my loan. I could have gone with any bank but I did not plan on being in my house for more than 5 years and a friend in the biz said ING was the way to go. I read everything which ING boils down very succinctly in their documents; I don’t remember any fine print. I thought I could use the rate renewal at any time for $500.00. Apparently there were stipulations I was not made aware of. I would have gladly paid .50% more for a fixed loan with my now hindsight vision. ING will probably themselves be upside down on this house – from what others have posted they don’t modify loans and are quite difficult to deal with on short sales.

      • Bob says:

        Was the $500 rate renew given in writing? If so, that’s just wrong of them to bait and switch you. On my Closing docs what I saw is what I got.

  • Bob says:

    Just did a refi with ING using their Black Friday $2,000 off special. 3.25% on a 5/1 with $106 in total refi costs. Appraisal came in low but we still had plenty of equity anyways.

    • M says:

      Good Luck. I just read that if you fall behind on your mortgage they will start taking money from your ING bank accounts to cover your mortgage. Better read the fine Orange print and keep your accounts separate.

      • Bob says:

        If I have the money why wouldn’t I pay my mortgage? Ohh yeah I forgot about all the people doing “strategic defaults” in overinflated markets when prices come back to earth.

        • M says:

          I’m so glad that you have not been touched by the misfortunes of life such as unemployment or disability. I wonder what the real percentage of mortgage failure is because of “strategic defaults” vs. those pesky unemployment figures that don’t include those who no longer qualify for benefits and those who are underemployed. I hope ING squeezes out a tear for you should your fortunes change. I’m sure you will pay your mortgage before you feed your children.

          • bob says:

            My point is if I HAVE THE MONEY I’m going to make my mortgage payment. ING can’t get money out of savings if there isn’t anything there. House payment is $326, I can’t find anywhere cheaper than that to live..

  • Katie says:

    Just did our rate renewal with ING. Got ours reduced from 6.25% to 3.875% for another 5 years. We did the appraisal for $450 and they are charging 1 month mortgage $2671 to do the renewal. Yeah thats a lot of money, but they take the appraisal fee off the $2671. They want the appraisal to be at least 10% higher than the loan you have with them. I have loan of $513K and they wanted the appraisal at $570K. Worked out for us. We also have a HELOC thats why we couldnt refi.

  • Mugundhan says:

    When I signed up for ING loan about 4 years ago, their rate was 5.875 %, using the rate renewal policy twice, I brought it down to 4.5 % except that when they did it the second time, they jacked the cost to $1500
    Then I wanted to take advantage of the 3.125% rate and called them, the said my house is under water and they need to do appraisal . I was calling them throughout 2010. I kept tracking the house prices and finally in August, I asked them to do appraisal and they now are ready to give me the new low rate after I pay them one month mortgage, I filled the paper work last week and expect to get the new rate from March
    The situation is good and bad:
    Good because no other guy will refinance me as I also have Heloc, still I obtained the best possible rate. I have the rate reduced from 5.875 to 3.125 % over a period of 4 years… not bad
    Bad because they keep jacking up the price for rate renewal, that indicates they are exploiting this in a bad way.
    Also I dont understand their problem of not giving the low rate for the houses underwater, once they give ppl the low rate, it will reduce the chances of foreclosing the house, it is a win-win for both. This is not a freebie they are doling out

    My judgement is ING found that this situation is the best to milk people, this mentality cost the economy and country big time and still the same attitude

    This is the corporate mentality side but I found that dealing with reps over the phone was a good experience, I have been with ING for over 6 years now and they are good to deal with but they dont set the policies. Just wish that the higherups have an empathy with house owners under water

    • SM says:

      Can you tell us little more on your appraisal? When you asked them to do the appraisal, have they in fact done the appraisal? Did the appraisal value came more than what you owe to the ING OR was it lower than what you owe and they still agreed to do the rate renewal? I am in the same boat as you. I have not asked them to do the appraisal yet, as I know that appraisal value will come out less than what I owe. Just debating if I should nonetheless ask them to do the appraisal. If you could tell your case, it will help out on my end. Thanks bunch..

      • Mugundhan says:

        Hi,
        The appraisal came at a higher value than I owe0, it met the loan to value criteria of ING and they approved me for the new rate….

        Hope it helps…

        Mugundhan

  • AS says:

    We’ve done the “rate renewal” thing twice now on our mortgage with ING Direct. Each time we did it, it’s dropped our monthly payment by about 10%, so it took about 10 months to recoup the fee. But we couldn’t be happier… we’ve had this house for 6 years, but are now locked into a 3.125% rate for years 7 through 12.

  • ann says:

    paid my mortgage for years and when I tried to do rate renewal told house values have fallen in my area and must pay 52K before they can rate renew. I guess they can do bait and switch as they like

    • SM says:

      Same case with me. I am told to pay down 72K before they can do rate renewal. I definitely think “Rate Renewal” has been a bait. I switched to ING from wells fargo 4 years ago just for this reason. If not for rate renewal, I wouldnt have been with ING. Now, I am stuck. They just dont want to do rate renewal without the huge down payment. If I were with Wells fargo, I would have been way better off as I would have been qualified for some government program (WF loans are backed by freddie mac and fannie mae where as ING loans are not backed by government). I seriously think folks like us can file a law suit against ING for luring us to taking their loans??. HELP NEEDED 🙁

  • Beza says:

    I have been with ING since 2003. I paid $750 once for rate renewal to lower the interest rate, then earlier this year one month’s mortgage to lower the interest rate and am thinking of doing it again. The one thing I would like to warn people is to pay your house insurance early (which is hard because like my insurance company doesn’t send the bill out until near the due date–so you don’t have time to shop around after seeing how much it the price of the insurance jacked up while your house value went down. Anyway, pay early and make sure the insurance company sends a copy to ING. I got a letter from ING that my insurance had been cancelled or expired and they might charge me for an insurance policy they take out. I guess they did take out a 90 day policy for over $1,000 and tacked it onto my loan. I called my agent who called them, sent them what they wanted and they said they might remove the amount they paid my policy. I don’t see any history of them adding or removing the amount from my loan, but who knows what they are up to in order to make money with the interest rates being low.

  • Mark says:

    I might as well write a quick follow up. My loan is now at 3.5% and everything went through without issue. ING sent me some paper work, I completed that paper work and mailed it back in. A few weeks later, my rate changed. No problems at all. Not extra costs and no hidden fees. One months mortgage and I received the new rate. I could not be happier.

  • Jason Wells says:

    I called ING to do a rate renewal on my Condo and they want the standard one month mortage and an additional $50K cash upfront… Apparently, according to them my condo is $50K under water right now which is ludicrous based on current sales activity that I am seeing… They are also asking $800 for an appraiser to come out… This is just nuts… If I wanted to pay all these fees then why would I have chosen ING to begin with…

    • Hugo says:

      I agree. ING is getting really bad. I paid of half the purchase price of my property in Boston and they played the same with me. I asked the lady:
      Are you saying property prices in Boston fell 50%???? She said she is just working from some tables…

      Well they deserve to keep more foreclosed properties maybe then they will understand that they are partners in buying properties and not blood suckers because then they will suck more…

      • SM says:

        OMG.., there seem to be many folks alike me. Hugo, check out my reply to ann down below at : December 21, 2010 at 3:31 pm. May be we all come together and make a case with ING on this.

  • Mark says:

    I just got off the phone with ING to do a rate renewal on my current loan. It is 1 month’s mortgage (which is less than $750 for me) and I verified the pre-payment penalty which is 1% on the first year.

    No single loan is ideal for everyone. I don’t know how someone can say this type of loan is only good for a small amount of people. How would we know that? It worked out great for me. Even if I were still in this house in 5 years (and I don’t intend on that) and the rate were 12% or even higher, and I paid that 12% rate for another 5 years, I will still come out ahead, then if I had kept my original loan.

    Like anything else, each person needs to spend the time and do the math for their individual situation. Factor in the what-ifs to consider many possibilities, weigh your risks and make an educated decision.

  • G says:

    Do not get an ING Direct mortgage – it is classed a Predatory Home Loan in Massachusetts, due to their 3% prepayment penalty. ING Direct may be a Predatory Lender in your state too. I held my loan for 3 years and did not miss a payment, upon selling my house ING took 60% of the profits as a fee without any warning, which is illegal under Mass State Law. I’m trying to recover the thousands ING decided to keep for themselves and I’ll let you know what progress I make on this site…

  • Shelly Coffman says:

    I am an investigator with the law firm of David P. Meyer & Associates. We are investigating a potential case against ING for allegedly promising consumers, who close a home mortgage through ING, a refinance rate of $750 for the life of the loan but not honoring that promise. If you would be willing to assist in our investigation or would like more information about this case, please call me at 1-866-827-6537.

    • Gail says:

      We selected ING because of the $750.00 refiance rate for the life of the loan and I asked every question to make sure it wan’t a bogus offer that they could withdraw after closing. I think I still have my e-mails regarding that. Well we are at 5.5 and I called to get the current rate of 4.5 and use our $750.00 option. I was told that It would be over $3,000.00 if ING would do it, BUT since our credit took a slight dip that we don’t qualify. There is no doubt that we were told $750.00 for the life of the loan and it was a nonqualify as it was not a refi. How is your investigation going as I think this is out and out fraud.

  • Kristi says:

    Be careful with their Amortization schedule as well. I read on another post that they were doing the schedule wrong on another customer and it would have cost him over $20,000.00 eventually. Fortunately for him he was experienced enough to catch it and it still took him over three weeks and eight hours of phone calls to get it fixed. Most people don’t even pay attention to the amortization of their loan, nor would they be able to notice a problem if it were incorrect. This is scarry since most people don’t have the mathmatical experience in such areas.

  • john says:

    I used to love ING too. now im almost convinved that they dont know which direction to go in. Within a few years they wil be taken over by someone else as well.

    Anyway, they qualified me several months in a row (rates were going down so i wanted the best one) So now i want to renew and suddenly i dont qualify anymore?? Hmmmm. why? they wouldnt tell me. They didnt even call back to tell me. i called and found out that it was denied internally within a couple days. Where’s the customer service??? Where’s the courtesy? where’s the deal about them wanting work and abide by federal law in modifying rates? I have nothing else on my credit that wasnt there a couple months ago but i want to take advantage of the rate renew feature as a customer… They said no very harshly and said they would reconsider if i gave them a substantial amount of upfront cash to refinance… Ridiculous and absurd. I’m parting ways with them. Every account will be moved elsewhere. Sorry ING, if you would not have been a DICK about it, no one would be saying anything negative. but true.

  • frustrated customer says:

    I have been beyond frustrated with my INGDirect mortgage. (Note: I LOVE LOVE LOVE their savings accounts..)

    However, ING’s home retention department honestly wins the “worst customer service EVER in the history of the universe” award.

    And sharing in the frustration: http://twitter.com/INGDirectSucks

  • J says:

    Ing is great for those who have a lesser mortgage than there old $750 fee. Mine is currently at 4.95 and I can refi it for $660 to a FREE locked in rate of 3.875 for 5 more years or 4.125 for 7 years. I have to decide to accept the locked in rate by the 25th of the month. You can play the rate game and lock in every month if you like to secure your best chance of finding the bottom on rates. Plus they are very competitive with the ARM rates and if you keep working on extra principle payments during the length of your ARM, you will come out ahead as long as rates do not spike anytime soon.

  • Susan says:

    We were offered the rate renewal option for one month’s mortgage payment for us is $599 and got a 7/1 arm for 4.125 and our previous rate was 5.375 since we were unable to refi after a year at this rate since LTV was now 97%. Our new payment is $520 per month now. Very happy we were able to get this new rate. I have been with ing for past 5yrs with mortgage and online savings account.

  • Gerald says:

    Hi,

    I refinanced recently with ING in part due to their flat-fee rate renewal offer of $750. They have now changed this and it would cost me quite a bit more to renew.

    It seems that this is dishonest at best and illegal at worst. I used to like ING but now I would recommend against it to anyone.

  • Bob says:

    I’d be HAPPY if they did the rate renewal for 1 months mortgage. $441 is a lot cheaper than $750…

  • Albert James says:

    I started doing business with ING Direct shortly after they opened doors. I had a direct, online-only, no frills savings account. I loved the interest rate, over 7%.

    ING later came out with a mortgage product. We signed up.

    Long story short, 5 years later, we try to take advantage of their simple “$750” rate renewal, and we are told the cost to renew the rate increased to one months mortgage. For us, that’s about a 4.5x factor.

    I used to love ING and their products, considered them innovative, even cutting edge. Unfortunately, my ultimate opinion about them is that they are simply luring in customers with high savings rates, low mortgage rates, the promise of easy/cheap rate renewals, then bait and switch.

    A few years ago I would have violently disagreed with your article, but I believe you have been proven right.

    Albert

    • John G says:

      Currently they have a $2500 cap on the amount this rate renewal costs, so it won’t get to the $3300+ price you’re referring to.

      When you can decrease your rate to something available right about now, you are very likely to save a lot every month – unless you have recently refinanced.

      I’m considering this rate renewal, but I need to read more about it. I assume right now that the terms are the same, except for a 3% penalty for paying off the mortgage within 1 year.

      If I do go for it, I’ll make sure to update this comment.

      • M says:

        Beware ING’s rate renewal. I signed up with ING just because of this feature 3 years ago. I took advantage of this last year and saved money.

        When I called to sign up again 2 days ago I was told that I do not qualify for rate renewal at this time. Because of the crashed Arizona housing values I now owe more than my house is worth. They run stats and if you are in this situation, you are not eligibile for the rate renewal.

        Housing values better turn around within 4 years or I am screwed 🙁

        • Hugo says:

          This is exactly one of the things I dont understand: OK Arizona housing prices are crashed lets say you are having negative equity and your mortgage with ING.
          Currently lets say you pay 800/month with refinancing and lock rate you would pay 600$/month. This would assure that they will get back their money. Or you can just say. Hey, take your home and sell it then they are scr#ed.. Why dont banks refinance a property that is underwater? They really deserve to own all those properties and take a bigger loss with foreclosures..

  • chessgames56 says:

    Hi all. Be careful of the sharky waters out there, and don’t be fooled by a teaser rate. Also, remember that since the prime lending rate is at almost 0% (.25%), any ARM is likely to increase, so it’s probably better to get a fixed rate mortgage now. Also, be aware that once you’re pre-approved, ING will charge you $350.00 if you back out later. This means that you may be locked into the loan before you get your loan package and understand all the details. My advice is to never initiate any contract under these conditions. Refinancing can be a complicated and stressful process, so it is best to educate yourself before hand, and do not give your credit card number away to acquire a loan or lock in a special rate.

  • Juan Miguel says:

    John P. If you’re investing $30k with any single annuity or company you get the right to demand some pretty solid info on where ur $ is going.
    Considering your investment timeframe I’d be looking pretty strongly at some gold right now too. You don’t know what the Government is going to put in place concerning the banks, wall st, and mortgages. One thing is certain however, our currency will soon be further de-based as trillions upon trillions of new dollars are added to the money supply this year.

  • MoneyNing says:

    John: It depends on which annuity you have with them. Give me more details and I may be able to find out for you.

  • John P.Thomson says:

    To whom it may concern:

    Please advise me how I can find out how ING -usa makes ITS investments…I own about $30,000 in a retirement annuity, income comes regularly each month; am retired, age 85; interested in stability and the methods of investment (mortgages, treasury notes, foreign banks, etc.) utilized by ING for its annuity business.
    Thank you. (any web sites or other sources)

  • Other sites have researched that particular bank and no one I know of has put funds there. Here is a link to review some info and comments on them:
    http://bankdeals.blogspot.com/2005/10/research-into-millennium-bank-and-775.html

    Our niche is safe, plain FDIC insured CDs.

  • Nina says:

    “CD Interest Rates”, what do you think about investing in a “foreign bank” where you would not be taxed on your earned interest? http://www.mlnbank.com/EN/about/faq.htm Have you heard of these guys? Their 1 year cd is over 5%, nontaxable.

  • Nina says:

    CD Interest Rates, I went to your website above and found 7% interest on 1 year CD at Patelo Bank in SF. Wow, I’ll check them out. Thanks.

  • First, everyone has a different tax situation, so Tax Advantaged investments help some more than others (apparently, they will help you quite a bit).

    Second, You have to weigh the tax advantages against risk. Many people like bonds because of the perceived low risk, they can do more than $100K, and of course the tax benefits. However, “low-risk” doesn’t mean no-risk. Many people thought the CDOs, CMOs, etc. were AAA rated and that the risk was diversified enough. Those people were wrong.

    Next, bonds are generally a long-term investment. They also are usually callable. This benefits the issuers. If you buy a bond at 4.5% and it lasts 10-years, will you be happy with that return. Or if rates drop (not likely at the moment, but rates do go up and down) and your bond is called, you will be faced with re-investing the funds at lower rates or longer maturities.

    Finally, I recommend a balanced approach to investments and wouldn’t recommend ever putting all of your eggs in one basket.

    I think bonds, CDs, stocks, etc. should be used to balance a portfolio. Most people recommend being more heavy in stocks when you are younger, because historically stocks out-perform fixed-income investments when you have a 20 to 30-year investment window. As people near and go into retirement, they generally move more funds into the fixed-income class to preserve principal.

    And my disclaimer, these thoughts are opinion only and should not be considered professoinal investment advice. And I’m sure there are many that will agree. :O)

  • Nina says:

    Correction: a 4% 1 year cd is only yielding earnings minus huge income taxes.

  • Nina says:

    Hello ‘CD Interest Rates’,

    Thanks for the articles.

    How would you respond to criticism that you have to pay taxes on the CD income even if I am in a lower tax bracket and hit the maximum AMT, I still have to pay full income taxes on the CD earnings. I have tons of tax deductions from my rental houses but hit the maximum AMT and still have to pay the full income taxes on my CD earnings. So, a 4% 6 month cd is only earning 2%. Therefore, non-taxable munibonds yield higher earnings. Correct me if Im wrong.

  • Nina,

    As you can tell from my by-line, I’m a CD guy. There are Gov’t agency bonds, muni-bonds, Corp. bonds, etc. I’m guessing they were either quoting muni’s or Gov’t bonds. I actually did an investing guide on various bonds (warning… self-less plug). Safe Investment Guide. It does not cover muni’s. Here is a link to some info on muni’s, http://en.wikipedia.org/wiki/Municipal_bond

    The bond terms can be as long as 30-years. So check the details carefully. Hope this is helpful.

  • Nina says:

    The info was very helpful… my strategy is to open a few online accts and spread out my money.

    Another idea to conservative investing in this volatile market is to buy a set of non-taxable high interest bearing bonds (@4.5%+) from places like fidelity and citibank for a 1% or so fee. Citibank guy was offering “no-load”, no fee.

    Ive never done this before … I know that your money is tied up for several years depending on the set of bonds you choose but you can get the interest out during that time. Is anyone in this blog doing this? What is your experience? Is there a better place to buy a set of conservative, high interest bearing set of bonds?

    I also know that these are not secured at all, but the strategy is to select a group of them to balance out any loses should any of the bonds go bankcrupt.

  • And FNBO Direct (First National Bank of Omaha’s internet operation).

    Countrywide currently has a 3.55%.

  • MoneyNing says:

    Nina,

    Try HSBC. I think they are offering 3.5% and they are pretty big (internationally).

  • Nina says:

    CDInterestRates,
    Actually, what really scares me is the thought that I cant go to a brick and mortar bank and line up to get my money out… the thought of an online bank just shutting down its website and phones is frightening. What other online banks has a 3.4% return or better?

  • @Juan,

    I think people thought IndyMac would be too big to fail, but yet, the FDIC took over. At this point, I don’t think any institution, except for maybe Bank of America is too big.

    Since, the internet makes it relatively easy to keep funds at different institutions, that is the way to go.

  • Nina,

    Although I believe it would be best to split funds up just for piece of mind, I actually believe you can structure the accounts such that they are entirely insured at ING. Check out the FDIC Insurance Estimator.

    I ran it with you having a single $100K account, you having a joint account of $300K with the children, and 3 POD accounts for $100K for each child. This insured $700,000. The reason is the single account is insured separately from the joint account, which is insured separately from the POD accounts.

    I would run your own report and double-check with ING, but it looks like the above method could be used to insure all of the funds.

    Again, though, I would suggest putting some of the funds at other banks. Especially, because most on-line savings accounts make it very easy to do so and there are similar rates out there.

  • Juan Miguel says:

    Well to put stuff in a more of a Macro Perspective for you. If ING, which is the 10th largest company in the world, were to fail more than likely there would be many other bank and Life Co failures as well and there would be few safe havens for anybody’s $ and I’m sure it would be extremely expensive. Now ING Direct is more than likely, I’m guessing cause I DO NOT REPRESENT THEM, a seperate subsidiary of the parent ING co. and therefore doesn’t neccessarily have the same financial strenght or balance sheet as the overall group. Plus ING is a Dutch company and it may not get the “To Big to Fail” FED bailout that other banks may enjoy. Bottom line- if bank runs and failures are your biggest risk, you’re pretty safe. If there is widespread bank failure everyone withouth a dollar stuffed mattress or bullion under their pillow will lose some money.

  • MoneyNing says:

    Nina: I really suggest you to spread out your cash in different accounts. Even the safest place is not safe enough when it comes to your own money, especially if you need to retire with this money.

    There are many other options to put your money and spreading it out would make sure your money is safe.

  • Nina says:

    I have $700k cash in electric orange acct… Im retired 40 something year old Mom living off the interest of 3.4%/month. FDIC only insures $100k max. I can create a 2nd, 3rd joint accounts with my kids, then that leaves $400k more unsecured. ING’s main business is insurance. I hope ING doesnt make any business mistakes like buying out banks in trouble, for example.

  • Juan Miguel says:

    Nina- check with your account to see if it is FDIC insured. If you have over $100k in there just put the difference in another FDIC insured account at another bank (i’ve been told that is a good way to protect yourself from a bank failure). Besides, ING is thriving right now… check out their market cap in comparison to the other large bank/life co’s out there over the past 5 yrs… AIG in particular. ING continues to outperform the competition.

  • Nina says:

    I have tons of money in INGdirect because of the liquidity and high interest 3.4%… better than most CD’s. However, I am very concerned that FDIC insures only $100K. With indymac in trouble, WAMU, Wachovia, Citibank, etc, I was wondering if INGdirect invested in the subprime and if so, how much. Im trying to access the risk of ING possibly going down like a bunch of other big banks.

  • Matt says:

    ING is by far the best mortgage company I have dealt with. I have experience with 4 lenders, including ING, over 4 different mortgages, and I will never even pick up the phone to call another company in my life. For the original poster: you’re a knucklehead if that ad “disturbed” you. 5/1 and 7/1 fully documented ARMs are most certainly not the reason the real estate market is in it’s current state. If you don’t understand that, then you’re part of the problem. I just received my loan docs for a 7/1 ARM re-fi at 5.5% and they are easy to read (literally no small print – all text is big) and easy to understand. INGs closing costs are super low $950 vs $4500 for Countrywide (Countrywide holds my loan now, and they wouldn’t give me but a few hundred dollar discount on my closing costs – now they won’t get any closing costs or any interest on the loan either.) Plus, ING doesn’t impound taxes and insurance, so I can set up my own saving account (with ING, of course) and earn interest on that money and only pay it out as it is due…imagine that, being allowed to act like a responsible adult and make my own decisions that benefit me. Furthermore, I paid no points for this loan and at any time during or after my fixed period, I can re-lock (not re-fi, there’s a difference – a re-lock doesn’t reset the overall payback term of the loan, i.e. 30 yrs, it just resets the interest rate and fixed term, then adjusts the monthly payments accordingly) a new rate for 5 or 7 years for a flat fee of $750. Not to mention I was able to take cash out for some home improvement projects without adversely affecting my rate – try swinging that deal with anybody else. In short, ING is a fantastic company with amazing and friendly customer service and secure and convenient online management tools. If you disagree with that, then you don’t have any idea what you’re talking about. For anybody considering a 5 or 7 year ARM re-fi with a loan to value of 80% or less, I highly recommend ING – you’ll be happy you went with them.

  • jimmy upsol says:

    Completly off key, if there product was such a bad one, why are they the lowest foreclosure bank in the USA, why does their stock rise while all the others fall….its because for most people a realistic ARM is a great product…who here is will to pay 100 more a month, plus tons of closing costs, to secure a mortgage they will surely not use for more than 10yrs (at most) you are going to move, refinance, and if you don’t ING offers you rate renewal options….we are in the mess because of subprime lending (ING never did any) and borrowers taking more than they should…stated income….well if you falsely stated your income then lost your house..should you be allowed to blame someone…..just my thoughts….

    • Julia says:

      Try to work with your lender first. Give them a call and let them know about your situation. In this housing market they might lose even more if they foreclose on you so many of them are willing to work with you to help you pay off the mortgage and save your house. All these mortgage companies have a department that help homeowners that are experiencing hardship just like you. Usually it is call the loss mitigation department. Just give them a call and tell them your situation and they will be willing to help you. Foreclosure and bankruptcy is the last thing you want.

  • Robert says:

    Overreacting to the solicitation from ING.

    The subprime meltdown has more to do with the following factors than it does ARM loans.

    1. Dishonest brokers and banks who deliberately mislead customers with bait and switch tactics.

    2. Inexperienced customers who didn’t *thoroughly* scrutinize the loan documents they signed and didn’t understand what was going on.

    3. Accounting fraud based on the incentive of high-dollar bonuses for short term gains.

    Every story I read from someone trapped with a bad mortgage claims that they were mislead into signing loans with ridiculous terms.

    In my experience with two previous mortgages, one of the oldest and largest lenders in the country attempted many tricks.

    I did NOT let this (unnamed Manhattan bank) bank get away with:

    1. Last minute paperwork swap in the branch office signing meeting while under pressure to close.

    2. Opening a credit card in my name against my explicit refusal.

    3. Adding over $7000 in servicing fees to the loan over and above their normal fees.

    4. Not redacting the fees that had been verbally agreed on with the broker.

    5. Terms which differed significantly between the verbal discussion with the broker and the paperwork.

    6. Other deception and high pressure sales tactics.

    I can only imagine what was done to people with bad credit by fly by night lenders who didn’t scrutinize every line and didn’t have the self confidence to stand up and say “NO.”.

    Does anyone here really think that Bear Sterns actually lost 10B. I think they never had it in the first place and the executives raking in multi-million dollar bonuses deliberately built a house of cards.

    No wonder the whole thing collapsed.

  • Beza says:

    I currently have a five percent 5/1 ING ARM, which will reset October 1, 2008. I don’t know if I should take their offer to pay $500 and go to a 5.25 percent loan for the next five years or wait and see what happens. The new rate is based on the weekly average yield on United States Treasure securities adjusted to a constant maturity of 1 year, as made available by the federal Reserve Board. The most recent Index figure available as of the date 45 days before each Change Date is called the “Current Index.” Then they will add 2 1/2 percent rounded to the nearest 1/8th of a percent. The rate will not be greater than 7 percent or less than 3 percent. It may go up to 11 percent during the length of the loan.

  • Andrew says:

    Let me tell you…
    I went to Quicken loans first (they are HORRIBLE)
    Then I tried Countrywide (pretty bad)
    Then I tried Citibank (OK)
    Then I tried ING (by far the best)
    ING is honest.
    They are looking to make a fair profit.. not ripping you off.
    If all the mortgage companies behaved like ING there would be no recession.
    It was greedy banks that gave to unqualified lenders that caused the whole “subprime” mess.
    And ING is an honest bank…

  • Bob says:

    ING now requires 20% equity and no longer does interest only or investment properties. They also bumped their rate up to 5.5%. Still cheaper than 6.5% on a 30yr fixed.

  • Certificate of Deposit Rates says:

    Mike, I think you mean “careful to not approve…”. Of course, most banks were not careful the last few years and thus further compounding the problem.

    Now, thankfully, banks appear to be taking more care and proberly taking risk into account. This has kept the mortgage rates from falling as the Fed has lowered rates. The Fed had hoped to help alleviate rate pressure, but have not been able to do so because of the proper taking account of risk.

  • Mike says:

    For people that intend to pay off a loan in 5 years, with the option of putting it off for up to 30 years, this option is perfect. This obviously isn’t for everyone, but it is for those that understand that if you make heavy sacrifices for 5 years to pay off the loan, you literally save hundreds of thousands of dollars over the next 25. I think ING is at risk as well (since foreclosures hurt banks as well as people) and they would be careful to approve just anyone for this type of loan.

  • Bob says:

    The 5.75% for a 30 would require about $3,000 in closing costs, the 5.5% @ 15yr would be about $2,000 in closing costs. High fees in addition to the higher rate is what keeps me from pulling the trigger on a total refi. If I could get into a 15yr fixed @ 5.25 for under $1,000 I’d be all over it.

  • Certificate of Deposit Rates says:

    Amen, Joe.

    Had people seriously answered those questions before, we wouldn’t be in this mess.

    When we looked at what loan to go with, the upside risk wasn’t worth the short-term gain.

  • Joe says:

    Why lock in at 5.25 for another 5 years when you can lock in 5.75 for 30 or 5.5 for 15? (just asking)

    Are you 100% sure you will move in 3 or 4 years? (military, dea, cia, whatever?)

    Are you 100% sure the ARM rate in 5 years will be as low as the fixed rate is now? (BTW, not a gamble I’m willing to take)

    Are you 100% sure your income is completely secure and if all else fells you can cover your ARM if you reset? (some are, if you are then rock on)

    COME ON PEOPLE. THINK

    BTW, I do think that ING is one of the good guys. They DO have caps on the interest rate change within a years time and they DO go off of the LIPOR average. ING is not the bad guy, but furthermore… if you got a bad ARM from a cut-rate-scam of a company then who’s fault is it???

  • Bob says:

    All that being said I locked in at 4.5% back in 8/2004 when fixed rates were running about 5.5%. I’ve been happy w/ING and am considering locking @ 5.25% for another 5 years. ING charges $500 to lock their current rate for another 5yrs.

  • Bob says:

    Here’s what disturbs me about ING:
    https://home.ingdirect.com/products/products.asp?s=AdustableRateMortgage

    “Chart based on $215,000 mortgage. Interest and principal amounts are from the first five years of the loan, based on interest rates for the 5/1 Orange Mortgage (4.75%) and the national average 30-year fixed rate mortgage with no points (6.60%) as of 6/11/2007. The current 5/1 Orange Mortgage rate is 5.250%, effective February 20, 2008.”

    ING never offered 4.75% or anywhere near that (they were about 1% higher) on 6/11/07, yet use that as their basis for comparison.

    ING really should update this for TODAY’S rates, or at least use what they offered on the date of comparison.

  • Bob says:

    An initial fixed rate can save you money – here’s how
    Most mortgages with an interest rate that can change over time, have a fixed rate for a specified initial period, usually between 1 and 10 years. After that fixed period ends, the rate can adjust. For example, if you see a mortgage that’s called a “5/1 adjustable rate mortgage”, the initial rate stays fixed for 5 years. The rate may adjust up or down every year after the 5th year.

    The Fixed vs Adjustable Periods
    Banks can’t just change the rate after the fixed rate period to whatever rate they like. The rate adjusts based on a financial index.

    We want to make sure you know everything about the Orange Mortgage, so here is how we set our rates.

    * The Orange Mortgage is tied to the 1-year London Interbank Offered Rate – more commonly known as LIBOR.
    * A margin is then added to the index that must be specified upfront and remains constant for the life of the loan.
    * As an example, for an Orange Mortgage that’s fixed for 5 years, if the 1-year LIBOR at the end of the 5th year is 4.50% and our margin is 1.50%, your new rate in year 6 would be 6.00%.

    The rate can be higher, lower or the same depending on what the 1-year LIBOR is at the end of the fixed term. Every year after that, the Orange Mortgage adjusts automatically to the 1-year LIBOR plus the margin.

    Can rates just go up and up and up……?
    It might sound like rates can still change a lot once the initial fixed period ends, but there are usually both annual and lifetime maximums on how much the rate can change. With the Orange Mortgage, the rate can adjust – up or down – a maximum of 2% a year after the fixed term ends, and can only increase by 6% over the life of the loan. The important thing to remember is that your rate can go up, down or stay the same.

  • bc says:

    I have a 5/1 arm with ING and love it. I’m wondering if I can refinance with them to their lower rate though.

  • ING_Michael says:

    Lay off of ING. They are one of the “good guys” when it comes to res mortgages. Ur arguement of “protect the passive consumer” is more of the reason we are in this mess than the “Product” itself. ARM’s have always been, and still are, a bonafide product. There was just too much stupid capital in the markets and they needed stupid people to sell it to- the ARM was the smartest way to do this. Stop making excuses and arguements for these stupid people- you are only further perpetuating the culture of passive consumerism. “Wha Wha Wha the Lender took advantage of me- Oh and I made the biggest investment of my life without reading the contract”. You’re pathetic.

  • burberry says:

    i have an ING 5/1 ARM mortgage, it’s great. ING is great in general. and it’s true what they say about the $895 closing costs. unheard of elsewhere. i’m completely happy with them.

  • Llama Money says:

    I see it as a “you have to do your homework” kind of deal. It’s like when you lease a Mercedes – they advertise the payment. They don’t mention the $140 oil changes, absurd maintenance costs, and crazy high out-of-warranty repairs. It’s just not ING’s responsibility to do our homework for us.

  • CD Rates Blog says:

    I’ve made this comment elsewhere as well. Greed + Stupidity in a Capitalistic Market Place = Financial Meltdown.

    Greed on the part of banks, brokers, mortgage brokers, etc. Also on the part of people jumping into the home flipping business that had no knowledge of the risks they were taking.

    Stupidity on the part of the people seeking the loans who didn’t do their homework.

    The marketplace had few controls in place to stem either. But ask yourself, do you really want the gov’t involved in every decision you make and “protecting” you from “evil, money grubbing” banks and brokers.

    For the money-takers, Gov’t intevention has already made the whole loan/title process daunting at best. You have to wade through a book of documents. Disclosures for this and that. No wonder, no one wants to read through all of it. But it is your responsibility to read through it, understand it, and make your decision.

    For the money-makers, quit thinking about yourself and your big bonus. Take some time and ask yourself if the product you are pushing is good for the one you are pushing it to.

    If more people would inject some reason, the US would soar.

  • Richard says:

    I got the same ad and I also just have a savings account with them. I didn’t think it was appropriate but at least it reminded me to uncheck the box that allows them to send me promotional offers.

  • MoneyNing says:

    Bob: Thanks.. I thought I was the only one who feel that way.

    Peter: Good for you that you know so much about the mortgage industry and history.

    I think I would’ve had a different reaction if I didn’t call ING direct and talked to the representative only to be sold the product without any of the disclosures that everyone is saying here.

  • ING was the one major lender who opposed the 2005 bankruptcy “reform” that ended the ability of courts to modify home mortgage terms — but courts CAN modify the terms of a second home loan or boat financing. In other words, it was a bill to screw homeowners.

    ING is one of the good guys. Being a lender they offer loans. Big deal.

  • MoneyNing says:

    Fiscal: Maybe you will agree with me if you know some people who were tricked into getting a ARM product thinking they can always re-finance.

    Unfortunately, not everyone was informed as they needed to be when they purchased their house since 2003.

    Will: This is definitely not the same as subprime but it doesn’t mean people weren’t tricked into these products when it doesn’t make sense for them. Even prime borrowers are getting into trouble because their rate is adjusting and they cannot re-finance.

    junger: Good for you that you’ve heard ING’s comment about ARMs. Unfortunately I did not get the same message from the ad and I actually talked to someone from ING and no where did they mention what you’ve just said.

  • Bob says:

    I agree that it does seem kinda lame that ING would send out ads like this when things have been making a downward turn. It seems to me that it only serves to makes things even worse than they are now.

  • junger says:

    I got that ad, too, but didn’t have the same reaction.

    ING’s Arkadi Kuhlman has talked a lot about how ARMs aren’t for everyone, but they can be appropriate for some consumers.

  • Will says:

    This is not anything like subprime. Adjustable rates have always been extremely well disclosed with annual as well as overall caps. Subprimes was about something far far worse – no doc loans, 100%+ financing, no caps, etc.

  • Fiscal Musings says:

    I don’t really see the ad as being quite as bad as you make it out to be. You can’t expect a company not to advertise.

    I see your point, but it’s not that bad.

    • M says:

      Please note that this article starts in 2008 and becomes current as you scroll down. Much has changed since 2008 – BEWARE ING. DO YOUR DUE DILIGENCE. ING is now found more as an online bank rather than the reputable Dutch bank it was when I refi’d. Some can benefit, some get screwed.

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