A new marketing ploy playing on the fear of unscrupulous banks is arriving in Treasure Valley mailboxes. The letter claiming an investigation of your bank appears to be a veiled home refinance offer.
Marsha K. Williams, vice president and retail and business relationship manager at Syringa Bank, did not know what to expect when a client called saying she had a letter that an investigation into the bank’s lending practices was under way.
“As you see, it is basically an offer of a refinance,” Williams says. “But, the way that it is worded is to approach the fear of the customer to convince them that they could be in a fraudulent situation with our bank.”
The letter reads: “Our office is investigating the lending practices of Syringa Bank to determine whether Syringa Bank engaged in deceptive or fraudulent lending practices. Records indicate that you may have the type of home loan or mortgage our investigative auditors are reviewing.”
Williams says, “Obviously, they got the information from public records as indicated in the footnote.”
The Better Business Bureau called the toll-free number listed on the letter, and Hal answered. When the BBB asked for the name of the company, the man disconnected the call. Emails and faxes were not returned.
In small print, at the bottom of the letter, it states the company is not a law office and does not practice law. Securitization audits are the only services offered. The disclaimer declares this is an advertisement for services only. There’s nothing stating how the audits will be used once they are produced.
Here’s how it works:
A third-party researcher scours various publicly available resources and records to find proof that your loan was securitized, meaning the loan was pooled with other loans and sold to investors.
A well-trained auditor can pinpoint the location of the loan among hundreds of thousands of investments. After discovering the exact location of the loan, the audit would be turned over to the mortgage holder. The audit, a multi-page document and an affidavit, can be admissible in court. The document will show whether the loan was securitized and, in some cases, what investor pool your loan belongs in.
Most information is public and available from the SEC. What the company provides is an affidavit— a statement of fact — that the loan was securitized.
There is nothing illegal about the letter, or the “advertisement” being sent out, the wording “an investigation” can cause angst for the recipient and banker.
“I felt like this was something that perhaps you needed to make the public aware as I am sure it will cause a lot of confusion,” Williams says. “I am sure we are not the only bank that has been mentioned in the letters.”
If you receive the letter, feel free to run it through the shredder and not give it a second thought.
Robb Hicken: 947-2115
