Usually, I don’t leave checks like that laying around in a box with old photos, operating instructions for some power tool and a beat-up hat, but this one was different. Under the check was a line that was urgent in its tone:

PLEASE READ ENTIRE DOCUMENT CAREFULLY.

Well, gollllly. If they are going to send me a check for $180,000 I guess I should read it.

They told me they had reviewed my “credit profile and the value of [my] property,” and “determined that you now meet the requirements to take part in the equity reimbursement program and activate the above equity cash reimbursement note.”

Jeepers. That’s great! A reimbursement note! Just like lost money or something!

It reassured me that it was “In compliance with the lending laws of the State of Massachusetts” and this “program” was “recently developed to reward homeowners for investing in the high appreciating properties” located in my zip code.

So, they are targeting specific neighborhoods and towns.

“The equity reimbursement program is your chance to be reimbursed for the financial investment you have made in your property.”

I’d hate to miss out on such an opportunity!

It reassured me that “[t]he equity reimbursement program is for all homeowner situations including those that are self-employed, have no proof of income, have credit problems, or have been turned down by other lenders.”

So that’s handy. It is targeted to just the sort of people most likely to be running into financial difficulty, or those who might need to “stretch the truth” to get the cash.

It was not signed, but the reverse side identified these generous folks as the Synergy Capital Mortgage Corporation.

As I mentioned, I’ll probably wait the evening for this entry to post, but I did want all of you nice folks to share my overwhelming sense of outrage wondering if a at least some of the houses in foreclosure in my neighborhood responded to such a letter.

Anybody out there recognize Synergy Capital? Get a similar letter some time ago? Anybody still wondering why the Feds are frightened that (at least) 57 banks are going to be closing soon?

As has been pointed out elsewhere, we may see a quick “Armageddon” crash or we might see a “slow burn,” which may ultimately be more painful to the average citizen, and here’s an example why: In a slow burn, we may be optimistic that this is a “temporary financial setback” and borrow from lenders like Synergy “until things turn around.” Such optimism might land us out on the street, unable to pay the large fees and interest rates that such “notes” demand in the fine print.

The temptation to get deeper into debt to maintain one’s lifestyle is a seduction to be avoided. Scale down, sell off, and re-prioritize. It is a paradox that the truism “There’s no such thing as a free lunch,” is now applied to the Mortgage companies themselves: There’s no such thing as making money from the bait and switch of offering a free lunch–although I’m not naive enough to believe that there hasn’t ALREADY been a large sum of money made by offering such “homeowner rewards” programs.

If you believe that most people aren’t stupid enough to fall for such a scam, think again. The economic illiteracy in the USA is remarkable, even among graduate students.

I know. I’m teaching the psychology of money this semester to a bright group that are amazed at what they are learning

Hate to break it to you but when a house is forclosed on it sells for what the market dictates (asuming it is left in somewhat decent conditions by the previous owner)- to ignore this would just perpetuate the overpriced housing market.