The meltdown among sub-prime mortgage lenders shows a particularly ugly side of the housing market -- the business of selling high-risk financial products to people who may not be that financially savvy.
Here's another: the flood of solicitations that spill in after you buy your home offering "mortgage protection" and other such critters. They come from companies that, more often than not, are bending over backward to disguise who they are or where they do business.
"The onslaught occurs when there's a transfer of title," said Tom Pool, a spokesman for the state Department of Real Estate. "It's public information, and that's how they find you."
I can speak with some authority about this practice because my family is now being blitzed with unsolicited offers.
We just purchased a home here in Los Angeles -- I like to think of it as the Contractor Full Employment Act of 2007 -- and there's been no shortage of concerned companies wondering whether I'm fully covered on the mortgage-protection front.
Mortgage protection is just a fancy way of saying life insurance. Policies are designed to keep a roof over your family's head in the event that you get run over by a bus.
One of the more straightforward solicitations I've received came from Family Direct Insurance Services in Folsom, Calif., which, to its credit, is easy to find through its website (familydirectinsurance.com). But the company's tactics still leave something to be desired.
"Our records indicate you are not participating in our recommended MORTGAGE PROTECTION COVERAGE," the letter says. "This ECONOMICAL term life insurance can PAY OFF YOUR MORTGAGE should you or your spouse DIE. It provides the SECURITY YOUR FAMILY NEEDS, at the PRICE YOU WANT."
I love it when strange companies shout at me.
Like nearly all such offers, Family Direct's pitch instructs me to fill out a form with a bunch of personal info, such as my height, weight and general health, and send it back in a postage-paid envelope. That's how they get you on the hook. A call from an insurance salesperson typically follows.
I reached the operations manager at Family Direct, Gail Quirk, who explained that her company, like rival insurance brokers, routinely combs through public records in search of recent home sales. Once a list of home buyers is compiled, letters go out.
"It's like any business," Quirk said. "There are always a few that give others a black eye."
