Just in the last two months we have received calls from two former borrowers who had been targeted for a new scam. It seems that there is a new way to try to separate borrowers from their money and at this time we don’t know if it is aimed specifically at Reverse Mortgage borrowers or all borrowers but since the borrowers calling us are all homeowners 62 and over, we know they are targeting senior borrowers for certain. It all starts with information which is public and can be obtained on line.

What these scammers do is get copies of the documents recorded on a borrower’s former home loans known as a “Reconveyance Deed” from the county public records which are available online. They write a letter which sounds very official and address it to a borrower from a company in the case of our two borrowers called something like “Recording Compliance Experts” or “Compliance Board” or something very similar to that.

This letter goes to borrowers and explains to them that they may not have had a Deed of Reconveyance filed and that this could cause them major problems in the future and that for a small fee of $140 to $175, this company will submit a request for a Deed of Reconveyance on the borrower’s behalf or obtain a copy of the reconveyance that was filed for them.

In one of the instances called in to us by a borrower of ours, the company even put a copy of the reconveyance deed in with the letter and the borrower had already received her recorded, original document but this company sent a very urgent message to her stating that she only had 30 days to act and so she was confused and called us. Lucky she did, she saved herself the $175 they tried to get from her. She did not need any service from them, her former lender (from 2008) had already recorded her Reconveyance (she had the original recorded document).

The “Compliance Service Company” was telling her she had to act in 30 days or less and that this would be the ONLY notice she received so that they could charge her $175 to send her a copy of the document she had already received over 2 years ago and for which she still possessed the original.

The other borrower’s company also stated this all capital letters and bold print to him: THIS IS OUR ONLY NOTICE TO YOU. DO NOT DELAY. RESPOND IMMEDIATELY TO ASSURE CLEAR TITLE. All underlined and sounds urgent…right? This is unreal, that there are companies out there that send letters to senior borrowers offering to perform a service which is totally unnecessary, and making it seem as though it is vitally important and time-sensitive.

The cost is great enough that they stand to make quite a bit of money if they can get enough unsuspecting borrowers to send in a check while it costs them next to nothing to send a copy of the recorded document which can be found online, but small enough to where many unsuspecting borrowers may feel that this is a legitimate letter and a service that they desperately need. They also word the letter to sound as though this service is vital, but they really don’t promise anything other than to send you a copy of the document that is already recoded if it is (and most of the time they already know it is because they’ve already been to the public records).

Our caution to all senior borrowers, and any borrowers for that matter, is that if you receive a letter offering to send you copies of documents or tell you that you need to assure that your existing loans have been reconveyed, first check to see if you received the recorded Reconveyance Deed from the country recorder. If you never received anything, the company who handled you closing (whether that was an escrow company, a title company or an attorney) can verify the payment of an existing lien holder. They can pull the copy of the recorded document online and send it to you without a charge.

The letter I received from a borrower states that if the company is unable to obtain a reconveyance on your behalf, they will refund your cash. So basically what they are saying is if it exists, they will send you the most expensive copy you could ever ask for and if it does not, they probably will do nothing to actually obtain a reconveyance deed from a negligent lender as they never ask for sufficient information on the form to begin the search. Beware of these offers.

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