Ripping Off Poor People

So this guy from Chase calls my mom and tells her he can save x amount of dollars per month if she consolidates her mortgage and a personal loan. My mom, of course, being all about the cash flow, said she was interested.

Here's the deal:

Consolidate $74k mortgage ($528/mo) and a $1,600 personal loan ($97/mo). Her present mortgage pmt doesn't include escrow pmts for taxes and property insurance. He claims he can consolidate all this crap, roll in $1400 closing costs, escrow her taxes and insurance, all for around $520/month. All she has to pay out of pocket is $325 for an appraisal.

She takes the bait and says she interested. He tells her he's going to look for the best interest rate he can get and call her back. (I know, he had to have an interest rate before he could calculate the monthly payment.)

He calls back and tells her that the best he can do is $640 a month. What happened to the $520? Nobody knows. She says no thanks. And – you guessed it – he tells her the $325 appraisal fee is non-refundable.

But, wait! At no time did she authorize said fee. So now she's waiting to hear if they can refund the fee. You bet your sweet ass they can and will refund that fee.

What's really sad is that she was the victim of predatory lending with her other house. She refinanced a mortgage that she'd been paying on for like 15 years into a new mortgage at a 22% interest rate. Yes, twenty-two per cent. It lowered her monthly payment. I don't know how many times I have to tell her – Don't talk to banks.

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7 Comments

Filed under The way the world works

7 responses to “Ripping Off Poor People

  1. You don’t expect a large, well-known outfit like Chase with a branch on every corner to exhibit predatory-lending behaviors. This has me thinking twice about the credit card I have through them.

  2. Katy

    Would you like to hear how I just closed my Chase debit card due to unauthorized fraud? Chase told me that I should call the companies, as I would surely recall making the purchases online. Well, here’s the thing, we all know that I am much too much of a prude to have bought anything from a company called KC Soft. Oh, and KC Soft LLC in the 519 area code doesn’t exist. Look them up. I have to say, however, that the lady in the local branch promtly closed my account when requested and she refunded my money and all of the overages.

  3. Very interesting scam. It’s only 9.95 so most folks likely won’t notice it. We must alert out neighborhood association!

  4. Indymel

    BWAHAHA! For those uninitiated to the Garfield Gazette, a monthly publication of the Garfield Park Neighborhood Association, we get BBB alerts in every issue. Usually, it’s stuff like– you know those penis enlargement signs that are posted on the telephone poles in the neighborhood? Yeah, don’t call that number. That’s a scam.

  5. Katy

    Yes, it’s only $9.95 each time they do it. And, there are 15 companies that hit you in succession. I ended up overdrawn and then Chase charges $32 per item you are overdrawn. Fortunately, I was able to get everything back. I have no idea how they got my debit card number.

  6. Well, according to the guy who just called to sell me identity theft protection, one in four households is victimized every day. That seems kinda high.

    Here’s a good organizational theory case study: If it’s the case that organizations do everything in their power to maintain their existence even after their mission is fulfilled (think YMCA and March of Dimes), what does a company that sells identity theft protection do to ensure they stay in business?

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