Foreclosure settlement spawning mortgage scams

VA Attorney General Ken Cuccinelli announced this week that claim forms are going out to approximately 46,600 Virginia borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011 and who may be eligible for payment under the $25 billion national mortgage foreclosure settlement.

Eligible borrowers had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo, the nation’s five largest mortgage servicers that agreed to the settlement with the federal government and attorneys general for 49 states and the District of Columbia.

The settlement, which took effect in April, earmarked approximately $1.5 billion in payments for 2 million borrowers nationwide who lost their homes to foreclosure during that period and had their loan serviced by one of the settling servicers.  The exact payment will depend upon the total number of borrowers who decide to participate.

imageForeclosure servicing settlement spawns new mortgage scams
The $25 billion mortgage servicing settlement  is already creating a new problem for distressed borrowers.
It seems fraudsters, who want to capitalize on the historic settlement, are calling homeowners asking them to participate in the settlement by providing upfront fees and personal information.

The Washington Post says homeowners in various states started receiving calls from parties who falsely promised cash payments from the settlement in exchange for a fixed fee.
In Alabama, some homeowners were asked to provide bank routing numbers over the phone, so settlement funds could be shipped to them, the newspaper reported.
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Beware of scams

Borrowers should not need to pay anyone to file their claim. Do not provide personal information or pay money to anyone who calls or emails you claiming that they are providing settlement-related assistance.  If you believe someone is conducting a settlement-related scam, call the Consumer Protection Hotline at (800) 552-9963 if calling from Virginia, or (804) 786-2042 if calling from the Richmond area or from outside Virginia.

Forms mailed to qualified borrowers, must be returned by January 18

In Virginia, packets containing a letter from the Attorney General, claim form, instructions and answers to frequently asked questions are being mailed to eligible borrowers beginning today and continuing through Oct. 12.

Virginia borrowers are urged to complete their claim forms and return them as soon as possible in the envelope provided, or file them online at www.nationalmortgagesettlement.com.

The deadline for all claims is January 18, 2013.Payment checks are expected to be mailed in mid-2013.

Free claim form assistance available

The one-page claim forms are simple to complete. However, borrowers who have questions or need help filing their claim can contact the settlement administrator, toll-free, at 1-866-430-8358, or send questions by email to [email protected].

The information line is staffed Monday through Friday from (7 a.m. to 7 p.m. Central).

Eligible borrowers do not need to prove financial harm to receive a payment, nor do they give up their rights to pursue a lawsuit against their mortgage servicer or to participate in the Independent Foreclosure Review Process being conducted by federal bank regulators. More information about that program is available at www.independentforclosurereview.com.

Eligible borrowers may get a payment from this settlement even if they participate in another foreclosure claims process. However, any payment received may reduce payments borrowers may be eligible to receive in any other foreclosure claim process or legal proceeding.

Eligible borrowers not notified should contact settlement administrator

Borrowers who believe they may qualify for a payment, but did not receive a notice because they have moved, should contact the settlement administrator directly to provide that information:

Call toll-free: 1-866-430-8358.  The line is staffed Monday through Friday from (7 a.m. to 7 p.m. Central).

Email: [email protected]

For more information about eligibility and filing a claim:

www.NationalMortgageSettlement.com

Email: [email protected]

Call toll-free: 1-866-430-8358 (hearing impaired: 1-866-494-8281).The line is staffed Monday through Friday from (7 a.m. to 7 p.m. Central).