Curious "Check" Hides Important Mortgage Questions

Peter G. Miller
OurBroker®

Near where I write these words sits a check for almost $50,000. Well, it sure looks like a check when seen through an envelope window, and the envelope in which it came certainly has a lot of important-sounding language on the outside. In fact, if not careful you might mistake the envelope for those used in official mailings by the federal government.

I'm not sure how unique the mailing is, however. The item was sent with bulk rate postage and -- what do you know -- the tracking number on the envelope was the very same one used in a similar mailing last month.

As to the object in the envelope, that sure has some check-like elements -- a signature line, a greenish print background, a "pay" command, and my name and address. Alas, the check-like item, whatever it might be, is "non-negotiable," "non-transferable," "non-toxic," "non-habit-forming," and perhaps even "non-fat" -- notices somehow not visible in the envelope window.

The good folks who sent this missive would like me to borrow money from them. Yes, I might qualify to borrow $50,000 with my home as security for the debt -- or maybe even more. Of course, the letter does not represent a loan commitment and I might not qualify to borrow a dime, but such details are hardly prominent in the letter.

About those details. Did I mention the interest rate? I don't know what it might be because no rate is mentioned. The length of the loan? Closing costs? Possibility of a balloon payment? You can hold the letter up to the light, read between the lines, fold it, mutilate it, and spindle it and still not find such information. For all I know, the loan could be a one-year balloon at 19 percent interest with $12,000 in closing costs.

If you read the small print, it turns out that I had the good fortune to be selected for this exciting financial opportunity because my name set off the right bells with various credit reporting agencies. Interestingly enough, such agencies have "opt-out" programs to prevent the distribution of consumer names for certain solicitations.

You can find more information regarding opt-out programs by visiting sites for the three largest credit reporting agencies: Experian -- TRW, Equifax, and Trans Union.

The information on these sites is very clear. If you just call a friendly 800-number your name will be removed from those available for various solicitations. There's no cost or obligation, so call now -- operators are standing by (or at least a computer gizmo is available) to take your information.

As to that $50,000 check-like thing, I don't think I'll spend it -- though several years ago a gentleman in California did cash a $95,000 promotional check delivered through the mails, no doubt much to the chagrin of the party that sent it....

Question Of The Week

Q We are interested in purchasing a home which has an addition built several years ago without building permits or an occupancy certificate. The owner is now applying for a variance. How can we protect our interests in this matter?

A It is possible that a variance won't be granted. It is also possible that without proper paperwork it will be difficult to get full insurance coverage.

One approach would be to make an offer subject to the seller obtaining all permits, certificates, and other paperwork 24 hours before closing. Please speak with your broker or attorney, as appropriate, for proper contract language and specific advice.

Weekly Resource

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Editorial Notice: Content on this page reflects the opinions of Mr. Miller only and not necessarily the views of any publication, organization or Website owner.

Published: September 8, 1998

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