From bait-and-switch tactics to inconsistent communication, today's borrowers lacking in trust
Many prospective homeowners enter the mortgage process from a place of vulnerability. That reality, and the industry's inability to meet borrowers with empathy and clarity, is at the center of rising consumer distrust.
“You’re providing intimate financial details, your dream of owning a home is on the line, and at any moment, that dream might be rejected,” said Nick Rickert, a loan officer with CU Mortgage Direct who regularly addresses consumer sentiment in the market. “People already feel like they’re under a microscope before they even talk to a lender.”
Disconnect between expectation and delivery
Mistrust often builds before a borrower ever connects with a lender. Online reviews, word-of-mouth horror stories, and social media anecdotes shape expectations long before the first conversation.
Then comes the process itself. Borrowers frequently encounter fees that shift mid-process without clear explanation. Routine charges - like $200 for a credit report or $180 to verify employment - seem inflated and arbitrary to many.
“The fees, quite frankly, are outrageous,” Rickert said. “I'm wondering the same thing the borrower is: how can this possibly cost that much?”
The problem compounds when initial promises don't match final outcomes. Promotional rates lure borrowers in, but the fine print often reveals thousands in undisclosed costs. “It becomes a bait-and-switch culture,” Rickert said. “And that erodes trust.”
Regulatory transparency versus practical experience
Federal regulations like TRID were introduced to bring greater transparency to the lending process. But Rickert argues they are only a starting point.
“The disclosures are the bare minimum,” he said. “Real transparency means discussing what could go wrong and how to handle it, not just handing over a form.”
Some lenders are using digital tools like progress trackers to bridge the gap. When combined with human explanation, these can reduce anxiety and clarify next steps. But automation alone isn’t enough.
“You have to explain what's happening in each stage and why,” Rickert said. “If you don't, borrowers are left to make assumptions, and that’s where trust breaks down.”
Meeting evolving borrower expectations
Today’s borrowers are more informed than ever. First-time buyers, especially younger ones, often arrive with research in hand and expect lenders to validate what they’ve already learned.
“When what I say matches what they've read, you can see the guard drop,” Rickert said. “That alignment builds confidence.”
Older buyers may have different needs, particularly around technology. The ability to toggle between digital and manual processes can distinguish a lender in a competitive market.
But across all demographics, the demand is the same: borrowers expect clarity, convenience, and a lender who communicates proactively.
Long-term trust versus short-term gain
Lenders focused solely on short-term volume risk long-term damage. Rickert warns that overlooking transparency to meet business goals can jeopardize brand equity and client retention.
“If you’re just trying to close the deal, you're giving up future referrals and repeat business,” he said. “You're hurting your reputation and the company’s.”
He recommends lenders implement communication service-level agreements (SLAs), proactively walk through loan estimates, and prioritize borrower education.
“I do screen shares to review the estimate line by line,” he said. “When fees change later, it doesn't feel like a surprise.”
Systemic shocks and borrower confidence
External disruptions to lending programs, such as delays in USDA loans during the government shutdown, offer a sobering reminder of how vulnerable some borrowers are to forces beyond their control. For many rural homebuyers, these loans represent their only viable option. When funding stalls or underwriting is frozen, confidence can quickly deteriorate.
“It’s heartbreaking,” Rickert said. “For some, USDA was their only option. Now, their leases are ending, and they can't close. They’re stuck.”
Moments like these amplify the need for proactive, human-centered communication from lenders. When consumers already feel anxious or unsupported, systemic delays only deepen the mistrust.
Rickert believes transparency and guidance are not just customer service best practices, they’re essential to borrower confidence. “We can't control everything, but we can explain what's happening,” he said. “And when we do that well, that's where trust begins to rebuild.”
