Monday, June 18, 2007

Mortgage scams

I can only describe this as a scam. I also expect to see more of these in the future from different lenders trying to bring more paying customers to their home lending divisions. With all of the media hype surrounding skyrocketing subprime foreclosures, it is no surprise that other lenders (even some who are neck deep in financial troubles themselves) are going to start marketing to secure homeowners; those with fixed loans and solid payment histories.

According to the article, GMAC was sending letters to those with mortgages telling them that refinancing to a safe lender was the way to avoid getting trapped in a company that may go bankrupt due to their overextended subprime loans.

The problem is that it is a blatant lie. If your mortgage company goes bankrupt, any loans you have with them would be sold to another bank. Funny thing is, the bank doesn't have to go bankrupt to do this, it can sell your loan to another company anyway. It happens all the time.

Look out for future mailings you might receive that will vary from this particular scam. If anything, keep to the #1 rule. If its unsolicited, it goes in the shredder.

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