National Mortgage Settlement: The True, the False and the Ugly Scam

house1 150x150 National Mortgage Settlement: The True, the False and the Ugly ScamMichigan Attorney General Bill Schuette is warning consumers about a new mortgage relief scam that uses the truth to mislead.

TRUE: In April of this year, a number of state Attorneys General entered into a settlement with five bank mortgage servicers: Bank of America, Citi, Chase, Wells Fargo, and GMAC/Ally. Under the settlement, the servicers will spend $19 billion on consumer relief, including principal balance reductions, interest rate reductions, short sales, and deeds in lieu of foreclosure.

FALSE: Borrowers will immediately know if they are eligible. The AG’s press release states that eligibility could take as long as nine months to determine. At that point, letters will be sent to affected homeowners. The settlement itself will be executed over the next three years.

UGLY: Scammers are already trying to use the real national mortgage settlement to swindle consumers into falsely providing their bank routing numbers. Attorneys General in multiple states have received reports of crooks calling borrowers. They claim to be one of the banks involved in this settlement and offer you a cash payment for providing your bank routing number.

If they were really your bank, they’d already know the number! Other scams have offered to get people money under the settlement quickly if you pay an up-front fee. Remember:

1) Never provide personal or financial information to a cold caller or someone who emails out of the blue. If they say they’re calling from your bank, hang up and get a proven contact number for the bank. Then verify the legitimacy of the caller.

2) If they ask you for the name of your servicer, or are vague about who they’re working for, they may be a scammer.

3) Do they offer to provide your personal information to assist you in identifying your account? If the caller is from your loan servicer, they will be able to tell you your personal information because they will have it. If they ask you to provide it, be suspicious and refuse.

4) Do they offer to speed your settlement relief for a fee? It’s a scam. Neither the banks nor your Attorney Genera will charge a fee to speed up payments or other relief.

To learn more about the National Mortgage Settlement, click HERE. You can also call the major banks in question:

Ally/GMAC: (800) 766-4622
Bank of America: (877) 488-7814
Citi: (866) 272-4749
JP Morgan Chase: (866) 372-6901
Wells Fargo:  (800) 288-3212

If you are solicited by someone offering to help you get relief under this settlement for a fee, alert your BBB and file a formal complaint with your state Attorney General’s Office.

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About Holly Doering

Holly Doering has worked for the Better Business Bureau Serving Eastern Washington, North Idaho, and Montana for half a decade. Her areas of expertise include the CORE Values Program (Character, Optimism, Respect, Ethics) for Teens and Charity Review as well as writing and editing. Prior to that, she has written for two newspapers, a local magazine, and taught English at the community college. She is the proud author of a short story in ZYZZYVA literary magazine and has had good luck publishing lots of poetry. Each year she rolls up her sleeves and wades into the autumn Nanowrimo writing madness and has several unfinished novels to her credit.