Protect Yourself!
A three part Bauer E-News series on ways to manage and protect your private information.  

Part Two: The Patriot Act. 

In our ongoing series covering consumer privacy, we thought it would be wise to shed some light on the newly passed USA Patriot Act and how it affects both mortgage brokers and consumers alike. They’re dirty words to many civil rights watchdogs, yet to others they serve as an added blanket of security to help fight the war on terrorism. You can decide how you feel personally, but in the meantime we thought you might like to know more about how this powerful act affects us all.

USA PATRIOT Act

Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Oct. 25, 2001)

You’re probably saying, Karen, this has nothing to do with me, I’m an honest American and haven’t terrorized a thing since chasing a sibling with a reptile years ago in the backyard. What, if anything, could an act to stop terrorism have to do with my home, my mortgage, my privacy, and me?  The answer – more than you may think.

 One thing is certain about the Act, the government has expanded the due diligence requirements of lenders like us in attempts to prevent an overwhelming amount of fraud that occurs in the financial services industry each year. As a result you may find yourself being asked for more information when applying for a mortgage than you may have in the past. This is in part due to new Patriot Act requirements, summarized as follows:

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or requests credit, no matter how small.

This means we are required to record your name, address, date of birth, and other information that allow us to identify you. We may also ask to see your driver’s license or other identifying documents. All information is kept confidential of course, but it is important to know why we ask these things in an ongoing effort to you to stay protected.

With the turn of the recent new year, additional requirements have come into play:

Beginning January 1, 2004, mortgage lenders are required to collect modified Race data, as well as new Ethnicity, Home Ownership and Equity Protection Act (HOEPA) Status, and Rate Spread data, to comply with the revisions to Regulation C, the implementing regulation for HMDA. The USA Patriot Act currently requires that financial institutions collect customers’ dates of birth instead of age.

See, we didn’t just want to check out the picture on your driver’s license, and we’re not personally concerned if you are Greek or Tasmanian, we’re now required by law to know who we are dealing with at all times.

A number of people tell us that they can get better rates online. While this may or may not be true (as we’re all generally sent the same identical rates on a daily basis) one must be careful when dealing with a computer as opposed to a real person, with a real office, in your own hometown. Someone you can trust who is there to respond to your needs.

Certain online mortgage companies may promise ridiculously low rates, but most fail to deliver. In fact, many merely record your information and pass it on (or most likely sell it) to multiple lenders. Here is where they make their big profits - without actually lifting a finger to help you secure financing! You the consumer then receive multiple phone calls from every hungry broker that received your information – companies you have never heard of - and those rock bottom rates are never to be found. In essence anyone can become privy to your private information – reputable or not – and without your direct consent, preventing you from personally deciding who will receive your information and who doesn’t.

This is why we feel searching for more than just ‘low rates’ in the mortgage industry is essential. The old saying “if it’s too good to be true it probably is” comes to mind. Service, privacy, and reputation play a key role in choosing your lender. Since a large portion of the mortgage process is to obtain and manage sensitive information we make it a point to put a name with a face, we’re so much more than a website. You know us, and can trust us – in fact - you can even come and see us in action. 

We here at Bauer will do our best to not only explain why we need the information that we do, but we also promise to keep it strictly confidential. We don’t sell lists or your personal information to anyone, so rest assured your relationship is safe with us.

Here are some general guidelines on ways to protect yourself:

1)     Know who you’re doing business with. Visit local offices, meet the people involved, and get to know them on a professional level. If it is an online or out of state company, search for proof of legitimacy by searching out licensing info or even a call to the Better Business Bureau in the state of licensing to verify an outstanding service record before moving forward.

2)       Avoid unsolicited email advertisements that ask for information up front. We all need to market our businesses to grow and stay competitive, but it’s important to first build a relationship before handing over sensitive information. Talk to the people involved, and follow up only after you have determine if they have integrity to protect your personal information. 

3)     When faced with the possibility of providing information you may not feel comfortable presenting, ask the following questions:

 Why do you need my personal information or social security number?

 How will my personal information be used?

 What law requires me to give you my Social Security number or personal information?

 What will happen if I don’t give you my Social Security or provide my private information!

Until next week!

Your friends at Bauer Mortgage Group.