Small Lender Busted for Deceptive Marketing by Local Media

201004051019.jpgReverse mortgage lenders using direct mail pieces which look like it was sent from a government entity is certainly not the way the majority of companies market their business but it continues to happen. Another case was recently discovered by NBC 12 in False Foreclosure notices.

One reverse mortgage lender which portrayed itself as Government Loan Division, UCL mailed Edie Bennett a piece of mail which said that a reverse mortgage could prevent her home from being foreclosed on despite the fact she is current on her mortgage. “I’m not delinquent and I’m not facing foreclosure,” said Edie Bennett during an interview with NBC 12.

According to NBC 12, the name of the company portraying itself as Government Loan Division, UCL, is United Capital Lenders. US Department of Housing and Urban Development data shows the lender is based in Southampton, PA and doesn’t have a large reverse mortgage division. The company endorsed 18 HECMs in 2009 and only 3 so far in 2010.

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To see the video check out the link below.

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False Foreclosure notices

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  • Last week a homeowner from West Virginia called me, because he received one of those notices via his mail. He was furious and said he and his wife have never missed a payment and wanted to know why I sent him that notice. I explained it wasn't me who sent it, and asked him why he thought it was me. He said the notice said it was from the “government loan division”, so he searched that phrase in google and located me (probably found a URL I don't use anymore – http://www.governmentloandivision.com).

    I explained about the recent false and misleading advertising and provided him with HUD's complaint number; 800-669-9777, telling him he needs to provide that letter to HUD and file an official complaint. He said he was going to call HUD as soon as we got off the phone.

    I hope that's the proper phone number to direct him to – please let me know if there's a better number.

  • rainmand,

    Why didn't you ask him to send you a copy of all he sent HUD? Maybe you are not telling us the entire story but that is what should always be done. After getting the info, you should turn it over to NRMLA for their action. Sometimes just a call from Peter Bell or another staff member gets the desired action.

    Did you advice the caller to send a copy to the FTC and their state regulatory agency? At least you tried. If you still have their contact info, you can do more.

    • I followed the complaint process proceedure documented in “HUD's Title VIII Fair Housing Complaint Process”. As per the policy, HUD will interview the homeowner, investigate the complaint, draft a formal complaint, and investigate if the complaint is accepted.

      I've just recently jointed NRMLA, last week, so that channel didn't cross my mind. I've been through all of NRMLA's website recently though, to see what was available, and didn't see anywhere whereas I could report something like this. Or a written policy or guideline that'd assist me with what I should do when I encounter situations like this. I wasn't aware I could email Peter (and Darryl too?) directly with something like this.

      • rainmand,

        Yes, call Darryl and ask him how to submit a complaint to the Ethics Committee. He will help you through it with as little effort as possible. Glad you handled the situation the way you did. I hope this info helps.

      • I think it would be great idea if there was a “button” on the NRMLA home page allowing you to register an ethics complaint. I don't think “rainmand” is alone in not knowing what to do.

  • My advice: When you see bad behavior, check to see if the offending party is a NRMLA member. If yes, report them to NRMLA AND let the member know they have been reported as well. If the offending party is not a NRMLA member, report them to their state regulator, their state Attorney General, and the Federal Trade Commission. My experience in reporting unscrupulous forward mortgage behavior on non-member firms/individuals to trade associations has been abysmal because there is no leverage: You can't kick them out of something to which they do not belong. I never faired much better with the regulators either, as my complaints were viewed as sour grapes over the fact a competitor was gaining greater market share than me. However, since the mortgage melt-down, these complaints run to the head of the class. If they don't, you can contact your local media's investigative reporter(s) and draw attention to the issue AND the fact it was reported to the local regulator, who will have a lot of egg in the wrong place when the camera is rolling and a microphone is put in their face with the question, “Our research shows this bad behavior was reported to you over a month ago; why haven't you done anything?”

    I hate to draw negative press to any issues regarding RMs but if someone is not a NRMLA member they probably are former Pay-Option-ARM or sub-prime sales people who don't care about the trouble they will leave behind once they have closed their .5 to 1% return on their mass mailing.

    • Ken,

      Whether they are a NRMLA member or not, report them to NRMLA. NRMLA is good about moving the complaint to the proper authorities. But reporting them to governing bodies should also be done. By reporting it to NRMLA, the number of complaints can be accumulated so that can also be reported.

  • Ken,rnrnWhether they are a NRMLA member or not, report them to NRMLA. NRMLA is good about moving the complaint to the proper authorities. But reporting them to governing bodies should also be done. By reporting it to NRMLA, the number of complaints can be accumulated so that can also be reported.

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