Note the (Very) Fine Print

One of the sleazier come-on’s I’ve seen the last few years is a very official looking document — complete with a “Case Number” and Department of Housing and Urban Development (“HUD”) seal (right) — that begins like this (all italics theirs):

Dear [Home owner]:

Your home loan has gone under review for the Freddie Mac and Fannie Mae Relief Program.  This recent review may enable you to streamline your mortgage into a new 30 year fixed interest rate with a lower monthly payment.

The Freddie Mac and Fannie Mae Relief Programs are designed to provide customers with a more stable mortgage product while streamlining the underwriting process.  This process will reduce your monthly interest payment by $350.

The pitch goes on to recite some other benefits of refinancing, and closes with, “Please call our toll-free number and reference the customer number at the top of this letter to begin the restructure process.”

The letter is signed, “Sincerely, Loan Processing Department.”

False and Misleading Advertising

All of the foregoing would certainly suggest that some governmental entity is contacting you to inform you about some loan assistance program that you’re eligible for.

Which would certainly be nice, given the number and complexity of such programs (with new ones announced practically daily).

You can practically hear the consumer’s (aka mark’s) wheels turning:

Wow!  Maybe I qualify for one of those mortgage refinancing programs I’ve heard about.

And they already have a case number for me!

Which must be how they know how much I’ll save a month!

Unfortunately, the fine print at the bottom of the letter gives away the ruse:

“Licensed by the Department of Corporations; we are not sponsored by or affiliated with your lender, HUD, FHA, or any governmental agency.”

In fact, when you call the toll-free number, you reach something called “the Rate Reduction Department,” which is quickly followed by a phone call from Lending Tree — a very for-profit online lender.

Hey! Minnesota Attorney General!

Hey! Department of Housing and Urban Development, Federal Trade Commission, etc.!

How about dispatching a couple idle staff to shut these guys down?

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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