Imagine receiving a cell phone in your mailbox, that once powered on, dialed your mortgage lender – and once connected, offered lower mortgage payments. Sounds like a dream right?
Well, First Guaranty Mortgage customers have reportedly received cell phones in the mail, programmed to dial the company’s loss mitigation department.
The move was employed to offer at-risk customers, those it was unable to contact through traditional means, money-saving loan modifications.
A similar tactic, utilized by SunTrust Bank, cut their non-response rate in half – it had been as high as 50 percent two years ago.
But why aren’t customers getting in contact with their banks and mortgage lenders, especially with all the media attention regarding loan modifications?
You’d think struggling borrowers would jump at the opportunity to secure a lower mortgage rate, extended amortization, or if they’re lucky, a principal balance reduction.
Perhaps some borrowers fear making contact, or are simply looking to fly under the radar for as long as possible before actually being evicted.
After all, it takes 417 days for a lender to simply send a foreclosure notice, and even longer to get booted. And hey, free rent beats a free phone any day of the week.
Then there are the many, many severely underwater borrowers who are probably strategically planning their exits.
Interestingly, a similar initiative to get customers to contact SunTrust using prepaid gift cards that required a call to the bank for activation saw less success.
At the same time, more traditional measures like hand-addressed letters to borrowers, a campaign led by Fifth Third Bank, seemed to see success.
Go figure.