A while back, I started getting letters in the mail, and nonstop phone calls from Freedom Mortgage. The letters were vaguely worded, saying “we acquired your loan. Go to this web site to refinance at a lower rate!” I’m thinking “acquired seems vague, that might not mean they actually bought my loan.” So, I ignored them. I’m not doing anything until I hear from my current loan company. I blocked their phone number, too.
Finally, I got a letter from my mortgage company, saying they sold my loan to Freedom Mortgage. So I unblocked their number, in case they need to reach me for anything important. I even called to get my account number, which they don’t even have for me yet.
Well, today I get a call from them. The guy is telling me he has a special where he can refinance me at a lower rate, and my monthly payment will go down by about $60. That actually sounds pretty good… as in, too good to be true. I told him to email me the details of everything and I’d consider it. One stipulation: The refinance would add some fees to the amount financed, and the 30 year financing would start over. Hung up, and immediately did some research. I figured out how many months are left in my mortgage, and multiplied it by my monthly payment. I’ll call this Value A. I took his new monthly payment that he was promising me, and multiplied it by 360. I’ll call this Value B.
Long story short: Value B is about $18,000 higher than Value A.
This is a scam. The interesting part, he said with the new refinance, I could continue paying what I’m paying now, and I would actually pay the house off a year sooner. That actually seems like a somewhat decent deal, but considering how scammy option 1 is, there’s likely some fine print in option 2 that makes it equally bad. They wouldn’t be doing this if they didn’t have something to gain from it.
A bit of googling, and I found this. That sounds a lot like the deal they’re “offering” me, but it puts things into even more perspective, because at the beginning of the refi loan, you lose a ton of equity that you’ve built up in the original loan.
I really can’t believe these people can get away with this. Has anybody else here dealt with this company? Or maybe there are some others that do the same thing. Any interesting stories?
Here’s what I believe they’re doing. People flip houses. You buy a house in bad shape, renovate it, and sell it at a profit. Freedom Mortgage is flipping mortgages. They buy up a bunch of mortgages, get people’s private information and start selling these “special offers” to their new batch of victims. A bunch of people get fooled into accepting, and some are able to catch on and refuse the offer. A couple of months later, they sell these loans off, then buy another batch of victims to prey on. Rinse and repeat. So I have a feeling they’ll end up selling my loan off again in the near future, especially after I refuse their offer. Either way, they refinance a loan, add $18,000 to the principal, then sell it to another mortgage company, and they just made $18,000. There’s probably some haggling involved, so maybe they sell it at a “loss” and only make $12,000. But either way, it’s quick money.
I’m right, aren’t I?