New Scam Targets Elderly Homeowners with Reverse
Mortgages
Clearly targeting senior citizens with scheme to sell
Deed of Reconveyance
By Michael Branson, CEO,
All Reverse Mortgage
Company
June 20, 2010 - Just in the last two months we have
received calls from two former borrowers who had been targeted for a new
scam. It seems that there is a new way to try to separate borrowers from
their money and at this time we don't know if it is aimed specifically
at Reverse Mortgage borrowers or all borrowers, but since the borrowers
calling us are all homeowners 62 and over, we know they are targeting
senior borrowers for certain.
It all starts with information which is public and
can be obtained online.
What these scammers do is get copies of the
documents recorded on a borrower's former mortgage known as a "Reconveyance
Deed" from the county public records which are available online. They
write a letter which sounds very official and address it to a borrower
from a company in the case of our two borrowers called something like
"Recording Compliance Experts" or "Compliance Board" or something very
similar to that.
This letter goes to borrowers and explains to them
that they may not have had a Deed of Reconveyance filed and that this
could cause them major problems in the future and that for a small fee
of $140 to $175, this company will submit a request for a Deed of
Reconveyance on the borrower's behalf or obtain a copy of the
reconveyance that was filed for them.
In one of the instances called in to us by a
borrower of ours, the company even put a copy of the reconveyance deed
in with the letter and the borrower had already received her recorded,
original document but this company sent a very urgent message to her
stating that she only had 30 days to act and so she was confused and
called us. Lucky she did, she saved herself the $175 they tried to get
from her. She did not need any service from them, her former lender
(from 2008) had already recorded her Reconveyance (she had the original
recorded document).
The "Compliance Service Company" was telling her
she had to act in 30 days or less and that this would be the ONLY notice
she received so that they could charge her $175 to send her a copy of
the document she had already received over 2 years ago and for which she
still possessed the original.
The other borrower's company also stated this all
capital letters and bold print to him:
THIS IS OUR ONLY NOTICE TO YOU. DO NOT DELAY.
RESPOND IMMEDIATELY TO ASSURE CLEAR TITLE.
All underlined and sounds urgent...right? This is
unreal, that there are companies out there that send letters to senior
borrowers offering to perform a service which is totally unnecessary,
and making it seem as though it is vitally important and time-sensitive.
The cost is great enough that they stand to make
quite a bit of money if they can get enough unsuspecting borrowers to
send in a check while it costs them next to nothing to send a copy of
the recorded document which can be found online, but small enough to
where many unsuspecting borrowers may feel that this is a legitimate
letter and a service that they desperately need.
They also word the letter to sound as though this
service is vital, but they really don't promise anything other than to
send you a copy of the document that is already recoded if it is (and
most of the time they already know it is because they've already been to
the public records).
Our caution to all senior borrowers, and any
borrowers for that matter, is that if you receive a letter offering to
send you copies of documents or tell you that you need to assure that
your existing loans have been reconveyed, first check to see if you
received the recorded Reconveyance Deed from the country recorder. If
you never received anything, the company who handled you closing
(whether that was an escrow company, a title company or an attorney) can
verify the payment of an existing lien holder. They can pull the copy of
the recorded document online and send it to you without a charge.
The letter I received from a borrower states that
if the company is unable to obtain a reconveyance on your behalf, they
will refund your money. So basically what they are saying is if it
exists, they will send you the most expensive copy you could ever ask
for and if it does not, they probably will do nothing to actually obtain
a reconveyance deed from a negligent lender as they never ask for
sufficient information on the form to begin the search. Beware of these
offers.
>> Other Reverse Mortgage Scams:
Reverse Mortgage Bailouts
>> SeniorJournal.com also does a great job of
reporting scams like this one on their
alert section
>> If you are a victim of this scam see
FBI Senior Fraud Section
>>
All Reverse Mortgage Company homepage
