Mortgage Servicer Multi State Mortgage Settlement Scam

Recently the news told about the multi state mortgage servicer nationwide settlement. That was true, and mortgage servicers agreed to pay a total of $25 million (USD). Unfortunately, as soon as the deal between the states and the mortgage servicers was announced, scammers invented the Mortgage Settlement Scam. Don’t fall for it.

Here is more about the Mortgage Settlement Scam:

People around the U.S. have been contacted by callers claiming to have a list of consumers eligible for money from the settlement. A caller, sometimes posing as a bank employee or a settlement administrator, asks for a bank account number, claiming it will be used to deposit money from the settlement. Online advertisements and scam telemarketers may also offer to help borrowers get home loan modifications through the national settlement, for a fee.

Here is an excerpt from the real United States announcement:

Attorney General Eric Holder and Secretary of Housing and Urban Development Shaun Donovan, along with most state attorneys general, announced a $25 billion legal settlement of investigations into improper foreclosures, mortgage modification misconduct and other abuses against U.S. homeowners by mortgage servicers. The lone holdout was the state of Oklahoma, which did not join the other 49 states included in the settlement.

In exchange for resolving those cases, the nation’s top five mortgage servicers — JP Morgan Chase, Bank of America, Citibank, Ally Financial and Wells Fargo, which service about two-thirds of U.S. residential mortgages — agreed to significant concessions.

Why the Mortgage Settlement Scam works:

Eligible borrowers who were foreclosed on between Jan. 1, 2008, and Dec. 31, 2011, will be notified of their right to file a compensation claim. That is true, and was agreed upon by the US Attorney general, state AG’s, and the mortgage (mortgage servicing) companies listed above. BUT the truth is that “For borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, a settlement administrator designated by the attorneys general will send claim forms to persons eligible for cash restitution.”

Who else will really contact you:

Borrowers may be contacted directly by one of the five participating mortgage servicers. You may contact the banks directly if you need additional information:

Ally/GMAC: 800-766-4622
Bank of America: 877-488-7814 (Available M-F 7am – 9pm CT and Saturdays 8am CT – 5pm CT
Citi: 866-272-4749
JPMorgan Chase: 866-372-6901
Wells Fargo: 800-288-3212 (Available M-F 7 a.m. to 7 p.m. CST)

The bottom line in the mortgage servicer settlement scam is like any other advice. Don’t give out your information and verify, verify, and verify even more before dealing with anyone. Never provide your personal information (including bank account numbers, social security numbers, etc.) to an unsolicited caller—no matter what they promise.