Stripped Bare - Beneath the Feel Good Veneer of Subprime Lending

Chapter 4 - Bombardment of Easy Dollars

At the height of the subprime lending boom, how often did you receive a phone call from a nationally known mortgage lender, or, for that matter, an unknown mortgage lender, soliciting you to refinance your home?  Two times per week?  Three times per week or more?  How many pieces of mail did you receive per week soliciting you to refinance your home?  Five pieces, six pieces, more?  How many television or radio spots did you view or listen to per week soliciting you to refinance your home?  Ten, a dozen or more?  And let’s not forget about the internet.  Were there any internet pages that did not display some mortgage lender’s solicitation to refinance your home, credit problems notwithstanding?

A large percentage of these solicitations, no matter what the advertising medium, begging for your business with promises of easy cash, no matter what your creditworthiness may be, were simply shotgun pellet scattered, in the hope that a new mark would be induced to call the offered 800 number for a “free” mortgage analysis.  There was no need for rifled advertising, as the subprime lending target was huge.

What about those individuals who were currently paying on a subprime loan?  How often were they bombarded with offers to refinance their home?  Current subprime borrowers were often solicited almost to the point of harassment.

Borrowers currently paying on subprime loans, in many instances, were solicited to refinance their homes on an almost daily basis.  In addition to the unsolicited shotgunned solicitations noted above, and the solicitations which arrived with each monthly mortgage payment coupon, current subprime borrowers typically received a minimum of one phone call per week, and possibly more, from the subprime mortgage lender to whom they were currently submitting their mortgage payment (the Servicer).  The call from the lender may have come into their home as simple “courtesy” call, or a “friendly reminder” to make your payment call, or simply a “mortgage checkup” call, but the end game of the subprime lender was to induce the homeowner to speak with an account executive in order to solicit (encourage) the homeowner to refinance once again.  And subprime lenders did do everything in their power to make it easy for you to refinance, again and again, even if you last refinanced less than six months ago, your credit was still sub-par, and you had little remaining equity in your home.

Posted by on 03/30 at 09:48 AM

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