Prevent Loan Scams
Newsroom

News Clips

10/15/12

Mortgage Borrowers: Beware Servicing Settlement Fraud

 

On February 9, 2012, the federal government and 49 state attorneys general announced that they reached a $25 billion agreement with the nation’s five largest mortgage servicers to settle charges of mortgage loan servicing and foreclosure abuses.  This National Mortgage Settlement will provide $1.5 billion as redress to eligible borrowers for the alleged unlawful practices engaged in by these servicers.  There have been numerous reports of fraudulent websites, phone numbers, and so-called foreclosure advisers falsely claiming affiliation with the National Mortgage Settlement in order to defraud borrowers. Any borrower who searches the internet for information about the settlement, sees or hears an ad about the settlement, or receives a call or letter promising access to compensation from this settlement must BEWARE of SCAMS.

Consider this example from a scam website:

We offer Claim Processing Service to help qualified participants get their settlement payments:
Service Includes:

 1 - Contact your Attorney General for settlement inclusion.
 2 - Contact your Lender to update your contact information.
 3 - Contact the Claims Administrator to request claim forms.
 4 - Form verification to ensure you meet all requirements.
 5 - Ongoing updates on the progress of settlement payments.
 6 - Unlimited customer service and support available online.  
 7 - 100% Money Back Guarantee for all qualified participants.

ONLY $29.95 for a Limited Time. 

This website is stealing from borrowers – all of the ‘service’ it is selling is actually FREE and already in process for eligible borrowers. On September 17, 2012, 2 million postcards were mailed to eligible borrowers who lost their home to foreclosure. These postcards were followed by a claim form and instructions which were mailed on or before October 12, 2012. DON’T GET SCAMMED.

 

Are You an Eligible Borrower?

  • Borrowers are eligible if they lost their home to foreclosure between January 1, 2008 and December 31, 2011.  The servicer of the loan at the time of foreclosure must have been one of these five servicers: Ally/GMAC, Bank of America, Chase, Citi or Wells Fargo.  GSE (Fannie or Freddie) ownership of the loans does not affect eligibility under this part of the settlement.
  • Oklahoma residents are not eligible because that state did not participate in the National Mortgage Settlement. 
  • Eligible borrowers will have to fill out and return a simple claim form to determine final eligibility.  The deadline for return of claim forms is January 18, 2013.  Borrowers will not access these benefits through their former servicer, Attorney General or through the Office of Mortgage Settlement Oversight.  However, borrowers can report problems to these parties.

 

Only some borrowers are eligible. If you receive a communication telling you that you are eligible for compensation under this settlement please remember: access to your benefit under the settlement is FREE.  Housing counseling to assist you in this process is FREE.  Do not pay money to, or sign an agreement with, any individual or company claiming to offer assistance.  Beware of anyone who wants payment in exchange for providing access to this settlement, or to any other foreclosure assistance program. 

For more information on the National Mortgage Settlement, click here.    

To locate a HUD-approved housing counseling agency that can assist you for FREE, click here, or call the Homeowners’ HOPE hotline, at 1-888-995-HOPE.

To report a scam, click here.