So you probably received an official-looking mailing from a mortgage company called The Federal Savings Bank. It looked something like this:
This is not any government notice — it’s an advertisement. A fraudulent one designed to make you think that it’s an important notice “for your records”. Welcome to The Federal Savings Bank — a company that appears to tread the line of legality in order to separate you from your money. Among the flashing red lights found in this dubious notice are:
- An NMLS ID and NOTICE NUMBER. These suggest to the reader that you already have some business relationship with the sender. The truth is that you don’t.
- The ad is called an “FNMA Enhancement Notice” leading the reader to believe that FNMA (Fannie Mae) has sent this letter to you. The truth is that it hasn’t.
- It refers to “aggressive enhancements made to Fannie Mae eligibility as of January 2016”. First off, enhancements are made to Fannie Mae rules constantly — over 30 of them in 2016 alone. But in January 2016, there were no significant eligibility changes. However, in January 2016, Fannie Mae did issue a fact sheet on its HomeReady mortgage. This is a mortgage geared to creditworthy low-to moderate-income borrowers with expanded eligibility for financing homes in low-income communities.
You can save yourself the phone call to The Federal Savings Bank by reading the one-page Fannie Mae fact sheet here.
Whatever you do, you don’t want to call The Federal Savings Bank. This misleading advertisement gives you a taste of what to expect if you were to do business with it. It may bear knowing that this “bank” has been repeatedly sued by Citibank for questionable activities. It also sells reverse mortgages, which are probably the worst kind of mortgage that exists in the marketplace.
Our major beef with The Federal Savings Bank is that they are attracting customers with a deceptive advertisement that borders on a scam. That’s why we don’t recommend that you bother with this company. And if you do apply for one of their loans, you will have given this company some personal information about you that they will undoubtedly sell to other questionable marketers.
We aren’t alone in our skepticism of this company. Check out the 37 complaints filed with the Chicago Better Business Bureau. But you don’t have to take anyone’s word for it. Just read this “Notice” ad and decide whether you want to do business with a company that tries to fool its customers. Our advice: there’s no need to do business with The Federal Savings Bank. We wish they’d been more honest with the consumers that they are targeting and their rates, while competitive, aren’t blowing us away. For more information about how to refinance your mortgage, check out our article here.