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SEVIERVILLE (WATE) - Many people might jump at the chance to get money back from their mortgage company due to some miscalculation. But is it a money saver or a scam?
The notice comes in an unsolicited letter that reads, "You may be owed a refund worth thousands of dollars." However, once you take the next step of calling the toll free number, you find out getting money from your mortgage company will cost you $300.
Kim Smith, of Sevierville, at first thought she'd get back some money. She received an unsolicited letter that says the mortgage company may have overcharged her for the home she bought in December 2005, and she could be due a refund.
"It says I'd get up to $1,497.32 or a third of the refund equals $3,000 to $7,500. We were all excited. We thought we were going to get it," she said.
The letter came from a company called Mortgage Auditing Program, a division of Consumer Services.
"Well the way I read it, I even called my husband at work and said, oh when you get home, guess what? We get money back on our house," Kim said.
The letter suggests that for some families, mortgage audits amounted to $7,500 so Kim contacted the company.
"This man said on the phone, oh the president signed a bill and the mortgage companies have to pay all these people back. And we thought we were going to do it, but when he said, he needs $299, I said no." She added that the company supposedly needed the money, "right then on the phone."
While 6 On Your Side was there, Kim called the auditing service and gave them the reference number provided in the letter. The customer service agent said, "We help homeowners like yourself get money back that is rightly owned to you by your mortgage lender."
The agent also said his company has many satisfied customers. "You received your letter because there is something about your mortgage situation that has raised a red flag with us," he explained.
He told Kim the audit costing $300 would discover any overcharge by her mortgage company and if she wasn't due a refund, she would get her $300 back.
"We have done 400 to 700 audits a week," the agent said, "so we are a very reputable company."
However, Better Business Bureau President Jerry Tipton said, "They've had 52 complaints in the past 12 months."
The company's rating is an F. Tipton says complaints against the company range from service to refunds.
Since Kim rejected the company's offer, she wasn't told about an additional service. "They also want you to sign up for a subscription for their debt reduction service, $49 a month and apparently a lot of people don't even realize they signed up for this," Tipton said.
Kim asked how the auditing company got all that accurate information about her home and mortgage. In Tennessee, each register of deed's office maintains that information, which is open to the public, at least some of it.
"The more in-depth records are by subscription service only so that makes it harder for the people who do these scams to get the records in Knox County," explained Register of Deeds Sherry Witt.
She says to safeguard personal information, her office has redacted Social Security information. "We contracted with a vendor, DTS, and they went in and masked the Social Security numbers that are put on during closing," Witt said.
Kim is thankful she saved her money and she shared this warning, which many people have heard before. "There are so many scams coming out, you better not give anybody money up front."
Many experts warn against home audit offers, saying any errors are to be pursued in court and many are not successful. If there were errors, you would need to hire an attorney.
The Federal Trade Commission goes even further, calling many audit offers scams.
6 On Your Side contacted Mortgage Auditing Program for a comment, but no one has returned our calls.
If you have a consumer issue, call the 6 On Your Side Hotline at 865-633-5974 or email firstname.lastname@example.org.