Don’t Call Us, We’ll Call You – Mortgage Refinancing Scams
Posted on Sunday, September 27th, 2009
Back in the old days (don’t you just dread it when I start a post like this?), folks got their mortgages from their local banks. You went into your bank, a brick-and-mortar establishment, sat down with the loan officer, probably somebody you already knew, and asked for the money you needed to buy or build your house.
If you grew up in a very small town like me, you may even have sat down with the bank president or vice-president to go over your loan application. It was customary to have your 20% down all set, copies of your income taxes for the last few years, your pay stubs, and everything else you needed ready to slide over the desk into the hands of the person who would be making the decision about your loan. That same person may also take your payments at the window, renew your loan, and refinance at lower rates when possible. Your mortgage was in the hands of a physical entity – your bank.
That’s the way it was in the old days. Our bank was personal and worthy of our trust.
What’s been happening lately? We all know that our local banks seldom if ever deal with their own mortgages anymore. Okay, that’s been happening for some time now. However, with the financial meltdown we’ve experienced, and mortgages being “underwater” or “upside down”, many homeowners are nervous and anxious when it comes to the future of their mortgage. Will they be able to continue making their current monthly payment? If not, will they be able to refinance with their bank? Nervous and anxious homeowners could be an easy target for the unscrupulous.
This is where the vultures start to circle.
When people start to panic about whether or not they’ll be able to afford next month’s mortgage payment, they become hopeful that there will be a “safety net” out there somewhere to catch them when it gets scary. Folks who grew up like I did with a trustworthy bank holding our mortgage, may still be putting their faith in the “bank” that holds their mortgage. This is what the scam artists are counting on.
Within the last several weeks, I have heard two very similar stories of possible scams. These mortgage holders, who risk no looming foreclosures, received calls from their “mortgage company” claiming that they could refinance at a lower interest rate and reduce their monthly payment. All it would take is some closing costs upfront to get the paperwork together. The closing costs they were talking about were anywhere from hundreds of dollars to thousands of dollars.
What tipped these people off that they were perhaps the target of a scam, or in the very least, an unsavory new “banking” practice? In one case, the closing costs were astronomical; not in line with the loan amount. In the other case, when called, the person was never in “the office.”
Were these scams? I really don’t know and neither do they at this time. But, here’s my take on it.
1) What would possess a mortgage company to make a call to a person who has a timely mortgage on a house that is not “underwater” in its equity and who is not even one month behind in the payments?
2) What mortgage company would want to offer to lower the interest and monthly payments on a house that is not in danger of foreclosure?
3) In fact, what mortgage company goes around calling their mortgage holders at all? If you are in need of restructuring your loan, refinancing so that you can keep your house, aren’t you responsible for making the call to your mortgage company?
This has scam written all over it in my view. I’m no expert by any stretch of the imagination, but I refer to an old saying that I love. “If it walks like a duck and quacks like a duck, it’s most likely a duck.”
It’s just like any telemarketing call, legitimate or otherwise. When I want to buy something or take advantage of a “once in a lifetime deal”, I will contact the business or person, not the other way around. I don’t suddenly want to refinance my mortgage because someone has called me with a “deal.” I will do the leg work and get the information and then call my mortgage company.
To be a bit less verbose (too late!) “Don’t call us, we’ll call you.” That should be your credo when considering any purchases, but most definitely when dealing with something as critical as your mortgage.
It’s difficult for people like us who were raised in a different era – it feels rude sometimes to say “no” and hang up the phone. But, you’ve worked way too long to get where you are now. We’re a polite generation, but we’re also not about to let anyone take advantage of us. Get in touch with your “feisty self” and remind those bottom-feeders just who’s at the top of the food chain!
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There are robocalls still going out that start out “Hello, President Obama …” and you push 1 to hear the refinance scam pitch or press 2 for no results. If you ask what the company name is, they hang up on you. Got another one today. It should be against the law to use the name or office of the President to entice people to partake of a scam. These people are lower than the pond scum in a cesspool.
You’re right. People are stressed enough with how they’re going to make ends meet, pay the bills, stay in their house. Scams just prey on these feelings. It SHOULD be against the law, just like you say. Scams prey on the most vulnerable among us. Disgusting. Thanks for sharing your feelings.