Mortgage Settlement Scams
What Is the National Mortgage Settlement?
The National Mortgage Settlement, also known as the $25 Billion National Mortgage Settlement, was announced early in 2012. It involves five of the largest mortgage services agreeing to pay a total of $25 billion in order to settle or avoid further disputes related to the mortgage and foreclosure crisis.
The settlement money is estimated to go to some 2 million current and former homeowners, for assistance in the form of principal reductions, mortgage relief, etc. Eligibility for the settlement money may vary, but persons who believe they are eligible should directly contact their current or former mortgage servicer.
What Are Some Recent Mortgage Settlement Scams?
After learning about the recent National Mortgage Settlement announcement, countless scammers and fraudsters have begun targeting homeowners and former property owners. Homeowners and those affected by the Mortgage Settlement should be aware of the following forms of mortgage settlement scams:
- Websites featuring the phrase “Mortgage Settlement”: Many websites seek to obtain personal information from persons by using this phrase. False websites can be avoided, and any inquiries or research should be done at the official National Mortgage Settlement website.
- Up-Front Fees for Payouts: A common mortgage settlement scam is where the scammer poses as an agent, asking for fees in return for quick payouts of settlement money. However, eligible persons are not required to pay any fees to receive the settlement payouts.
- Third-Party “Mediators”: Beware of any phone calls, e-mails, or letters from persons or groups claiming to be mediators between you and the bank or mortgage company. If you’re eligible for the assistance through the settlement, you will be contacted directly. Do not provide any suspicious parties with your personal contact, bank account, or tax information
- False Bank/Trust Accounts: Some scams involve the fraudster asking the homeowner to deposit their settlement funds into bank accounts or trust funds. This is not a necessary part of the settlement process. Also, you should never provide your own bank account information to suspicious parties over the phone.
- Requests for personal financial information. Some scams involve phone calls or emails, where the scammer asks the homeowner for bank account numbers and promises to deposit the settlement money directly into those accounts. You should never give your bank account number or other personal financial information to anyone over the telephone or email. If you’re unsure whether the call or email is from your loan servicer, contact your servicer directly.
Overall, you should be wary of any parties or persons who simply aren’t the bank or mortgage company you work with. The mortgage settlement will generally occur through direct interactions between eligible parties and the bank/mortgage company. Mortgage settlement scams are similar to other types of scams such as sweepstake scams.
Note that the warnings listed above don’t just apply to the National Mortgage Settlement announcement, but can generally apply to other settlement or payout arrangements as well.
Should I Hire a Lawyer If I Have Been Victim to a Mortgage Settlement Scam?
If you believe that you have been a victim to a mortgage settlement scam, you may wish to contact a lawyer for advice or representation in court. You may also wish to contact a lawyer for advice regarding your eligibility for a settlement payout. An experienced lawyer in your area can provide you with much-needed assistance regarding mortgages and foreclosures.
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Last Modified: 11-20-2013 12:24 PM PST
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