McGraw
CHARLESTON, W.Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw on Friday told state homeowners to beware of companies claiming to be working with banks as part of the recent nationwide mortgage foreclosure settlement.
According to the Attorney General's Office, the scammers typically offer to tell a homeowner whether he or she is on an "eligible list" for an up-front fee of $500 or more.
Also, they usually ask the homeowner to provide bank account numbers, promising to deposit the settlement money directly into the account.
McGraw's office said the scammers tend to pose as third-party companies "working with the settlement" or as a representative of one of the five banks -- Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America Corp.
"Unfortunately, thieves often prey on those most in need," McGraw said in a statement Friday.
"Homeowners should never provide their bank account and routing numbers in the belief that this is a legitimate part of the settlement."
The deal, finally reached between federal officials, 49 state attorneys general and the banks after many months, is worth $25 billion but only covers those mortgages held by the five banks, not Fannie Mae or Freddie Mac.
Much of the settlement -- $18 billion -- is earmarked for California. West Virginia will get more than $33 million in assistance for struggling homeowners.
Of that, an immediate estimated payment of $2,000 will go to each state homeowner who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011.
More than $18 million will go to loan modifications and benefits to state homeowners currently in default or foreclosure.
More than $5 million will go to free refinancing for "underwater" but current state homeowners.
Another $6 million will go to foreclosure and mortgage assistance and prevention programs in the state.
McGraw's office has organized a workshop to administer the funds recovered by the Feb. 9 settlement with the five mortgage servicers.
The workshop began to travel the state last week, first stopping in Morgantown.
"The mortgage-foreclosure settlement is good news for struggling homeowners," McGraw said Friday. "It can prevent foreclosures and provide financial relief to those affected by foreclosures and mortgage fraud."
The attorney general said relief and benefits available under the settlement can include loan modifications, principal reduction, direct payments, free "underwater" refinancing, safeguards for military, and more.
"We have the opportunity to return to a stable lending environment with growing rising homeownership while lending a hand to borrowers who need financial help or a second chance," he said.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.