After the 2008 meltdown, a prominent mortgage banker, who was accustomed to living very extravagantly, started a “Loan Modification Consulting” business as a way to bolster his company’s waning revenues.
The only small problem was that it was 100% illegal, as his firm was collecting large fees (thousands of dollars) up front with no guarantee of obtaining the loan modification (as few lenders were granting them at the time).
That gentleman lost his license and has long since been out of the industry.
Similarly, another prominent group of former mortgage brokers started to offer business loans to businesses struggling during the recession. They too collected fees up front and made promises that could not be kept.
Worse, they even convinced the public that their scheme was a viable business and they started to sell shares in the business… before going to jail (I hate it when that happens).
Anyway… desperate times make for desperate people, particularly if they are accustomed to driving Lamborghinis and living in $3 million homes (like the guys I mention above were).
I bring this up because we are already seeing an increase in fraudulent mailers going to homebuyers after their loans close.
What is very frustrating for us is the fact that many of the fraudsters impersonate our mortgage bank by putting its name on the mailers, and implying that the fraudulent firms are affiliated with us!
They of course are not affiliated, as we NEVER SELL ANY BORROWER’S INFO, NOR DO WE MARKET ANY NON-MORTGAGE-RELATED PRODUCTS.
The slimy companies get our info and our borrowers’ info from public records, as both grant deed and mortgage info are made available to the public (this is actually a good thing because it puts creditors and future buyers on “notice,” as to who the owners are and what debts are owed against the property).
In any case here are some of the mailers homebuyers receive:
Offers to Refi – into rates that cannot be obtained. These mailers come from call-center mortgage operations that imply they are affiliated with our mortgage bank. The hope is often to talk borrowers into a cash-out refi.
Mortgage Protection Insurance. These are just way overpriced life, job loss and disability insurance offers.
Homestead Offers. Borrowers can declare a portion of their estates to be protected “Homesteads” and therefore exempt from bankruptcy proceedings – for FREE. Slimy firms offer to do this for exorbitant fees.
Certified Grant Deed Offers. Some companies try to sell homeowners copies of their own grant deed (that they can easily get themselves).
Insurance Offers of Every Type. Insurance companies offer hazard, fire, flood, life and every other type of insurance imaginable.
After loans close, we actually send out emails to all of our borrowers that warn about these scams. But, borrowers still reach out to us to ask about them because the scams/mailers are so convincing (often because they put our mortgage bank’s name on the mailers).
So, this blog is my reminder to agents that they too might want to warn unsuspecting homebuyers about these scams.
Once again – we never sell any of our clients’ info to anyone, nor will we ever, and we never offer anything other than mortgage services, e.g. refis when they are actually viable.
