AG Warns of Scams from $25B Mortgage Settlement

The ink is barely dry on the $25 billion dollar mortgage settlement with banks that is meant, in part, to compensate homebuyers hurt by fraudulent foreclosures but the scam artists are already at the door.  The Rhode Island Attorney General is warning consumers in his state that some homeowners have been contacted by individuals claiming to have a list of persons eligible for funds from the settlement and are misrepresenting their credentials. 

Attorney General Peter F. Kilmartin said that persons have been reported to be posing as bank employees or settlement administrators and requesting bank account information in order to deposit settlement funds into the homeowner's account.  Kilmartin said none of the lenders, who will eventually be responsible for contacting eligible homeowners, have yet begun to do so.

There have been other reports that fliers are appearing in Rhode Island neighborhoods that have been particularly hard hit by foreclosures offering assistance in obtaining mortgage modifications.

Kilmartin said, "Unfortunately, during this time when many Rhode Island homeowners are struggling with their mortgages or facing foreclosure, there are unscrupulous scam artists seeking to take advantage of homeowners in desperate financial straits.  This behavior is not only despicable, but in Rhode Island, it is illegal for an individual or an entity to charge an up-front fee to assist with mortgager modification.

Individual lenders have set up special hotlines for borrowers to call with questions about the settlement benefits.  The Attorney General said that consumers should not give bank account or any other personal information to anyone of whom they are unsure.  Also, there are no fees required to participate in the Office of the Comptroller of the Currency's Independent Foreclosure Review Program or in the Attorneys General settlement.

Answers to frequently asked questions and lender contact information can be found here: http://www.nationalmortgagesettlement.com/help/#ConsumerAlert