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03/07/12

Attorney General: Beware Loan Assistance for a Fee

 

RIVERSIDE — Riverside County homeowners struggling to meet their mortgage payments were warned by state officials Tuesday to beware of scam artists offering loan modification assistance for an up-front fee.

According to the California Attorney General's Office, last month's $25 billion National Mortgage Settlement with five banks could be used by shysters to scam distressed borrowers out of money.

Under the settlement, Ally/GMAC, Bank of America, Citi, Chase and Wells Fargo agreed to distribute funds to 49 states to provide financial assistance to people upside-down on their mortgages.

The agreement was in response to allegations that lower-level employees at the banks had sidestepped rules on authenticating mortgage loan documents, using a process called “robo-signing.”

The California Attorney General's Office negotiated a separate agreement that assures an $18 billion commitment to the state for homeowner relief.

Riverside County is slated to receive the second-largest share of that — $1.59billion.

Los Angeles County will receive the highest distribution — $3.92 billion.

According to state officials, scam artists, citing the settlement, could phone borrowers claiming they're offering loan-modification assistance for an up-front fee. The Attorney General's Office says state law prohibits front-loading loan-mod services, and borrowers should report any such solicitations to the California Department of Justice

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