|“Community Reinvestment” Scam|
David Lazarus’s column in the July 14th San Francisco Chronicle tells of a misleading direct mail sales pitch promoted by two Southern California mortgage companies to entice homeowners in lower income neighborhoods in San Francisco to refinance home loans. The envelope appears to be from the San Francisco County Census Tract Community Reinvestment Act and carries the warning “Important document – do not destroy.” It suggests that the homeowner has been pre-qualified for a home loan with a potential large cash subsidy from the government.
Enterprise Mortgage Company noted that the fine print on the back specifies that “Enterprise is not endorsed by, nor associated with any federal, state or local government.” Synergy Capital Mortgage, the other company promoting these mailers, has decided to stop the sales campaign after receiving complaints. Many Bay Area homeowners are led to believe they’re eligible for government reimbursements when in fact they are being steered to sales pitches for conventional loans. A direct mail company in Southern California, iVault, boasts a dozen clients for this sales campaign, including Enterprise and Synergy. Over 850,000 direct mail solicitations are sent out each month.
A San Francisco recipient of one of the letters commented “I’m surprised there’s no law against this.” California Attorney General Bill Lockyer’s office is looking into the matter.
To register a complaint, call the State Attorney General’s Hotline (800) 952-5225