BBB Tip of the Week: Mortgage settlement

In February 2012, 49 states and the federal government reached an agreement with the top five loan servicers, called the National Mortgage Settlement, which provides as much as $25 billion in relief. So far, more than 7,000 Washington state residents have received new loan terms and $521 million in benefits as part of the settlement.

The key provisions of the settlement include loan modifications, assistance for current mortgages that exceed the home’s value, and assistance for those who lost their homes to foreclosure.

The settlement applies to loans serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase or Wells Fargo between Jan. 1, 2008, and Dec. 31, 2011. The banks have been directly contacting many of those who qualify.

If you think you may qualify for assistance under the terms of this settlement, visit www.nationalmortgage settlement.com. The deadline to submit a claim is Jan. 18, 2013.

Scammers target settlement homeowners: Because these banks are contacting borrowers directly, a door has been opened for scammers.

At least one state involved in the settlement has received complaints that scammers claiming to be from a lender are calling borrowers to solicit personal information, including bank account numbers for direct deposit of relief funds. Unsuspecting borrowers are vulnerable to the theft of their identity and bank accounts.

If legitimate, the caller will know which lender they represent. Similarly, a bank representative will be able to tell you your personal information because they already have it. And the BBB reminds you to never provide your personal information to an unsolicited caller.

Instead, test your caller. Ask them for contact information. Tell them you are going to call your bank to confirm what they have told you before you call them back. A scammer will probably hang up or give you incorrect information. Either way you have beaten the scam.

If you think a scammer has called you about the National Mortgage Settlement, report it to the Washington State Office of the Attorney General at www.atg.wa.gov or by calling 800-551-4636.

Erin T. Dodge, BBB Editor