Archive for April, 2006

Congratulations homeowner . . . hello junk-mail.

April 26, 2006

One of the not-so-joyous joys of home ownership is junk mail.  Regardless of how you answer your preferences on a privacy-policy with a lender of mortgage broker, you are going to get junk-mail.

And here are a few reasons why . . .  

Reason # 1:

Because you purchased a home (assuming that you needed to take out a mortgage on the house) the mortgage information is public record and is recorded at the county courthouse.  The transfer of title is recorded in the form of a Warranty Deed and the fact that you have collateralized the property with a mortgage is recorded in the form of a Security Deed.  Because this information is accessible by the general public (hence the term, public records) companies and solicitors have access to your name, your property address, your lender/investor, whether or not your loan has Private Mortgage Insurance, or PMI, and your original loan amount.  And, for those of us in Georgia, because the Warranty Deed is stamped with the state of Georgia’s transfer tax amount paid (which costs $1 per $1,000 of the purchase price), the price that you paid for your home is easily determined as well.  For example, if the Warranty Deed is stamped with the seller paying $200 in transfer tax, then the property must have sold for $200,000.

Junk mailers and solicitors gather the information from the courthouse (or purchase it from a directory-consumer list company) and use it to send you everything from coupons, to flyers, to notices about refinancing.  Some of the refinance and second mortgage solicitations are the worst and most misleading going so far as using phrases like, “Please call immediately concerning your Hillside Lending mortgage . . . ”  Just to give you an idea of HOW misleading they can be, listen to this — I came home from work one day and opened a piece of mail and it was addressed to me and said it was from the “Loan Acquisition Department” concerning my second mortgage with “XYZ Bank.”  It said that I needed to call immediately, that there was an issue with my account, and they needed to speak with someone as soon as possible.  A 1-800 number was included with the letter and, assuming that my mortgage had been transferred or sold to another company, I picked up the phone and called.  I was SHOCKED when the under-skilled (and probably under-paid) telemarketer answered the phone and started asking me details about my second mortgage, current loan amount, interest rate, etc.  When I asked for the “Loan Acquisition Department” she didn’t even know what I was talking about and when I mentioned the letter, she didn’t even try to fake it . . . she just said, “Oh, yes sir, we would like to talk to you about refinancing your second mortgage.”  What!?!  I think I said something about her company being a bunch of crooks, fraudulent at best, and about me calling the Better Business Bureau or the Governor’s office, or something to that effect.  I think her response was something to the affect, “Uh, sir, does that mean that you aren’t interested in hearing about how we can save you up to $100 per month on your second mortgage?”

Reason # 2: 

A lot of loan services offer ancillary services as part of their affiliate companies.  The most popular (at least based on the shear volume of times they send you notice — 1st notice, 3rd to final notice, 2nd to final notice, final notice, “Your Not Protected” seriously-this-is-your-final-notice) and most annoying in my opinion, is the mortgage-life-insurance product sold TO the consumer as a way “to protect their loved ones”, and sold BY the loan servicer as the easiest way to protect their loan.

Please don’t misunderstand me, I DO think that it is a good idea to have enough life insurance to cover your mortgage balance, I’m just not sure that I want my wife to be required to pay off the mortgage in the event of an untimely death.  (Mortgage-life-insurance is usually a declining value life insurance premium that decreases at the same pace as your mortgage balance and in the event of your death, the policy is used to pay off the mortgage).  If you would like a recommendation for a life insurance agent (and good friend of mine) who would be willing to walk you through the planning process to determine what products are best for you, please give me a call.

Reason # 3:

The privacy policy of the mortgage broker or loan servicer may allow for them to sell certain information or share information with affiliates.  Read carefully!

So, to reiterate something you will find out every time to walk down your new driveway and open your new mailbox, let me be the 381st person to let you know, “Congratulations, you’ve been selected . . . “; “Do not bend, important information inside!”; “Important account information enclosed”; “Please Respond with 5 days”; “Time Sensitive Material Enclosed”; “You May Have Won $1,000,000 dollars!!”

. . . yeah, so, good luck with that.