Beware of mortgage letters that look super official but aren’t Loaner

Lately we’ve been hearing a lot about trigger tracks due to legislation trying to ban them.

If you’re not aware, when a lender pulls your credit, the credit bureaus will happily sell your information to competing banks and lenders, letting them know you’re looking for a mortgage.

The result is being completely bombarded with phone calls and text messages offering to use them instead.

They have not yet been banned, in part because agencies like the The CFPB actually wants consumers to do more comparison shopping. And that’s one way to make it respected.

Even if you haven’t applied for a mortgage recently, homeowners (myself included) have received official-looking letters that appear to come from their existing bank or loan servicer.

What is an equity reserves summary?

Recently, I received a “Summary of Equity Reserves” in the mail (which I’m glad to have opened so I can share with you).

First of all, I’ve never heard this phrase in my life, but I believe some version of it is used by mortgage lenders to solicit homeowners.

The bottom line is that you have “equity reserves” that can be tapped if you call the number on the notice.

My particular letter listed the name of my old loan servicer (they didn’t know my loan had been transferred to a new one, I assume), the address of my property, and a hypothetical amount of equity available to leverage.

It also contains an arbitrary file ID number and a customer support center phone number with hours listed, but oddly enough, no physical location.

It also said: “Please retain a copy of this notice for your records. »

Of course.

Is this an official opinion or official nonsense?

Basically, the companies that send out these forms do their best to make it seem like an official notice. And that you MUST respond as if it were something urgent or obligatory.

In reality, it’s just a cash-out refinance offer masquerading as an official-looking notice.

Now there’s no harm in sending a refinancing offer in the mail. I receive all types of spam emails daily regarding countless products. It’s just life.

The problem is that this is an official notice when in reality it is just an advertisement.

It’s only when you really study the fine print that you see that it’s a third-party mortgage lender.

The lender in question was one I had never heard of. Again, it’s good for them to advertise.

But when it doesn’t look like an ad but rather something sent from my loan servicer, it seems a little misleading.

Mortgages are already complicated enough, so we don’t need more confusion.

People already don’t understand things like loan servicing transfers, where the company that issued your loan sells it to another company to collect monthly payments.

Or how a servicer can transfer your loan to a new servicer. This also happens far too often!

So when companies start writing silly reports like this, there is a risk of even more misunderstandings.

And then you need to ask yourself if you want to work with a lender like this.

Always Read the Fine Print to Determine What’s Really Happening

If you take the time to read these deals, be sure to check out the fine print section. You may need to break out a pair of reading glasses.

By reading it, you will quickly discover that it is a mortgage refinancing offer.

And while an example (low) mortgage rate of 5.75% is listed, it was noted that all offers will have different terms.

Additionally, it states that it is a third party lender, not endorsed by or affiliated with my current lender.

With the disclosure that your actual rate and payment may be different depending on X, Y, Z, blah blah blah.

And finally, that all information contained in this document comes from the public domain.

Unfortunately, once you become a landlord, much of your information is available for companies to solicit.

That’s all well and good, but businesses need to be more upfront and honest.

Personally, I would like a potential mortgage lender to be a lot more transparent if they are making me an offer.

But I get it, these reviews are probably more eye-catching and may result in a better conversion rate for the lenders who send them.

Let this serve as a warning. The next time you receive an official wanted notice, it may just be an advertisement.

And as I always say, if a lender contacts you, contact other lenders.

As the CFPB says, get multiple quotes instead of settling for the first one you hear or see.

Especially when they include a line saying you need to call by a certain date for them to complete your “review.”