Mortgage firms still trolling for suckers

[n2doc]

What's behind the continuing bombardment of too-good-to-be-true mortgage solicitations?
By Carol Lloyd, Special to SF Gate
Friday, October 5, 2007


Ever since the real estate market boiled over, melting down the mortgage industry and its cheap-money feeding frenzy, I've been waiting for one happy outcome: an end to the roar of mortgage brokers at my various doors.
But no. Via e-mail, fax, phone and daily mail, mortgage solicitations have continued to pour into my life. Next thing you know they'll be hiring skywriters, smoke signalers, carrier pigeons or staging musical revues:
"No matter your desire, no matter your need,
a college education, a thoroughbred steed,
a neatly bundled debt, a retirement RV,
it's all for the taking in your equity!
In the past few weeks, the mounting offers have formed a mountain on my desk, each offer promising a mortgageable moon, each aiming for a creative slant on the old chestnut "Here's a deal you just can't pass up." (Or as Lenox Financial — the controversial "no closing costs" (i.e. higher interest rates) lender likes to put it in its radio ads: "It's the biggest no-brainer in the history of mankind.")

Some offers focus on turning the idea of equity into a lifelong solution for any problem. A mailer from US First Credit Union unfolds into a 16x24-inch blueprint of a fabulous house. On the house plans, various rooms are labeled according to what they can buy you: a new SUV, a college degree, bill consolidation, etc. All you need to do is take out a home equity line of credit: a 15-year fixed for "as low as" 7.49 percent. And because they "want to wake you up to days full of excitement and possibilities" (Hey, who wouldn't want that?) the company is including a "FREE 3Day/2night Getaway" to 22 destinations.

Other companies focus less on the life of infinite possibilities and more on the world of insurmountable woes. A notice "from the desk of Angie McGuirt" at Wachovia bank, informed me that I was "pre-selected" (always good for your self-esteem) for an equity line of $250,000 with a variable rate of Prime minus 0.5 percent — now amounting to about 7.75 percent. If this sounds like a so-so deal, Angie reminds me that it's "far less than you'd pay for most credit cards or other personal loans." (In other words, "You're probably hemorrhaging money every month, let us stanch the wound.") Um ... yes, but you can't lose your home using a credit card. I call Angie to learn more about the deal, but the broker informs me that no one will speak to me because I'm a journalist. "We refer all journalists to the Web site," she says. What about Angie? "She doesn't take incoming calls."

Despite the current mortgage morass, in which subprime and Alt-A loans are increasingly difficult to obtain, many companies are still attempting to lure us in with too-good-to-be-true offers: "A mass-fax touting a "New Refinance Program" with no company name made this offer: a "1 percent" 30-year fixed loan. The lender didn't care if I had bad credit, was going through bankruptcy or foreclosure. If I took out a $500,000 loan, my monthly payments would be a mere $1,608!

more:
http://www.sfgate.com/columnists/lloyd/

[Rosemary2205]

1. I got one in the mail today.

Anyone with 2 braincells knows all of the homes in my neighborhood are worth $100-$115 tops. I was offered $230,000 refinance with payments as low as $530 a month. Even at free money it doesn't add up for 30 years. But then I guess they figure they'll pick off one or two in a town where over 70% supposedly live at or near the poverty level and likely couldn't afford the house they live in now if they had to buy it now.