Assurity Financial Services, LLC, was issued an Order to Cease and Desist by the Idaho Department of Finance for sending mailers to Idaho residents entitled "Refund Notice," suggesting that recipients' current adjustable-rate mortgage may have been the subject of errors in principal and interest calculations. The mailer indicates that "A Refund Audit Specialist will be able to help you determine your correct principal and interest payment and assist you in collecting any refund that you may be legally entitled to." In fine print at the bottom of the document, the homeowner is informed that their consultation may include a solicitation for a home loan.
Assurity does not appear to possess any specific information suggesting that those homeowners receiving the Refund Notice did in fact have errors in their principal and interest calculations. Consumers responding to Assurity's Refund Notice report that they were advised to refinance their mortgage through Assurity Financial.
"This is a classic bait and switch," Gavin Gee, Director of the Idaho Department of Finance, said. "This marketing ploy takes advantage of the fact that when lenders record certain mortgage loan documents with the county, they become public records. Mailings are then targeted to homeowners and contain just enough correct information to mislead a consumer into thinking the sender actually is knowledgeable about the consumer’s loan. In this case, if the consumer takes the refund ‘bait’ and calls, they are ‘switched’ to a solicitation to refinance their mortgage with Assurity."
The Department determined that the mortgage loan solicitations were misleading and deceptive and in violation of the Idaho Residential Mortgage Practices Act. The order directs Assurity Financial to cease violating the Idaho law and cease engaging in advertising that is misleading, confusing, false and deceptive.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.