A growing list of companies know who you are, they know what you did and they know how much you paid to do it. And they'd like to have whatever money you've got left over.

You are a new home owner. Scores of companies make it their business to get your business by sifting through public records to add your name to their bulging direct marketing databases of potential customers, including, they hope, born-yesterday suckers.

They sweep the public records every day harvesting names, addresses, the size of your mortgage and any other data that's recorded with your deed.

After you closed escrow on your home purchase, see, you or the title or escrow company recorded your grant deed, a document the seller signs to hand over to you ownership of the property. You also recorded what's generally called a deed of trust. That says you are in hock to the lender, where you wish this direct marketer would send their pitches. But instead reams, of this "junk mail" (hard copy spam) shows up in your mail box.

One particularly obnoxious boiler-room operation to watch out for is the "declaration of homestead" ruse. State-level homestead laws vary widely, but generally they are designed to protect all or some of the equity in your home from creditors should you get in debt over your head.

The idea is, if creditors can take your home you won't have much incentive to pay off a credit card bill, bad ding on your credit report or not. Before you can protect your home however, you must file or declare your homestead with a document filed at your local public records depot, usually the county recorder.

Homesteading operations offer to do it for you, for a small fee. The fee is so negligible, say $20 or $25 or so, and the pitch so compelling: "You could lose your home if you don't declare your homestead now," you are likely to go for it. Don't.

First, filing is a simple matter. Your county recorder can assist you. There's a small filing fee. Sound familiar? The direct marketer will charge you twice -- once for the county and once for the direct marketer's coffers.But it's not just the fee.

Some homestead filing services just take your money and run, as Dr. Christina Jacqueline Johns, a senior fellow at Florida State University, Tallahassee will tell you.

In some states, you don't need to file unless creditors are nipping at your heels. You can even wait until you are in bankruptcy court. File the declaration before it's necessary and you could send creditors the wrong signal. Both current and potential lenders who think you filed to protect your equity because of some ensuing financial crisis could write you off as a bad risk -- especially if your credit is already marginal.

Check your state's homesteading law before you even open one of those official government-issue looking manila envelopes. Some states, including California, regulate homestead filing services.

The Direct Marketing Association says you can reduce 75 to 80 percent of the direct marketing mail you receive simply by asking the association to remove you from the lists -- provided they are members.

Marking envelopes "Return to Sender" and dropping them unopened back in the mailbox saves time and costs them money.

Published: October 8, 1999

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