State Attorney General warns borrowers to avoid mortgage-related scams
YAKIMA – “It’s the happy endings that keep you going,” says Tracy Harden, a certified housing counselor who has been helping debt-swamped consumers for 17 years.
Harden, who works for Apprisen (formerly known as Consumer Credit Counseling) in Yakima, has certainly seen her share of hard-luck stories. In a recent incident, she tried to help a client navigate a short-sale. Harden says the client’s lender refused the first offer on the house and didn’t respond in time to a second offer. When the frustrated buyer decided she couldn’t wait any longer and withdrew the offer, Harden’s client, who was heartbroken to lose her house, was forced to hand over the deed to the bank. Returning to pick up some things she had left behind, she found the house hadn’t been looked after by the bank. Someone had forced their way into the home and the landscaping she had carefully tended was severely damaged by trespassers.
But there are success stories, too. Harden speaks of a client whose husband moved out, costing one income. The second income was lost when the client became disabled. Before a grown child stepped in to help, the client, who had spent 23 years in the home, was several months behind on her mortgage and on the brink of foreclosure. Harden was able to work with the client’s lender, lowering the interest rate from six and a half percent to three, saving about $350 a month — and the client’s home.
Harden today joined Washington State Attorney General Rob McKenna in Yakima to remind besieged borrowers that there’s light at the end of the tunnel – free help for those who have received foreclosure notices or fear they’re about to.
“Non-profit housing counselors in Yakima and throughout the state provide a lifeline to families struggling to keep roofs over their heads,” said McKenna. “Loss of income and reduced home values are realities that thousands in our state deal with every day. But for those who need help navigating mortgage challenges, help really is just a phone call away.”
McKenna was in town promoting the Washington Homeownership Information Hotline, which connects struggling borrowers with counselors such as those at Apprisen. Today he repeated his warning that borrowers should stay away from those who offer potential loan modifications for an upfront fee, adding that such pitches come in email, phone calls and letters.
“The bottom line is that if you think you might be at risk of foreclosure, call the Washington State Homeownership Hotline at 1-877-894-HOME,” said McKenna. “Don’t accept any offer from someone who wants you to pay for help obtaining a lower mortgage payment.”
“We’re a non-profit driven by a desire to help people find a better financial footing,” said Kelly Perkins, Apprisen’s Regional Operations Manager. “We urge people to seek out non-profits like ours, as opposed to those attempting to take advantage of homeowners in desperate situations.”
McKenna used funds from settlements with mortgage lenders –$600,000 from a settlement with Countrywide/Bank of America and $550,000 from the Wachovia Wells Fargo settlement – to help fund the hotline, which connects borrowers with non-profit counselors approved by the federal Department of Housing and Urban Development (HUD). He says stories like those told by Tracy Harden are why his office spends so much time righting wrongs in the mortgage-lending industry. That work recently involved helping lead negotiations that resulted in a $25 billion settlement with the five biggest lenders.
McKenna noted that discussions are ongoing about how a portion – about $45 million – of Washington state’s proceeds from the settlement might help support programs such as those that provide homeowner counseling. He also emphasized another important development involving the settlement: letters from lenders that detail huge benefits.
The recent National Mortgage Servicing Settlement requires servicers to notify eligible borrowers of the programs that may be available to them. Bank of America, Wells Fargo, Chase Mortgage, CitiMortgage, GMAC and their affiliates have been and will continue sending out thousands of letters to eligible borrowers explaining the available programs.
Borrowers are beginning to receive the letters detailing potential principal reductions or loan modifications. However, some of the banks report borrowers aren’t responding promptly.
“You must open your letter and respond in order to benefit from the settlement” said McKenna. “If you question whether the letter you’ve received is genuine, you can do several things: you can call your lender directly to confirm whether you are eligible. You can contact a certified housing counselor or you can call the Attorney General’s Office for assistance. We hope people don’t miss their opportunity to take advantage of the assistance we fought to provide.”
McKenna’s office has posted step-by-step instructions, including a how-to video, for borrowers facing potential foreclosure: http://www.atg.wa.gov/foreclosure.aspx
• National Mortgage Settlement: http://www.atg.wa.gov/NationalMortgageSettlement.aspx
• Foreclosure and mortgage tips: http://www.atg.wa.gov/page.aspx?id=28330
• Washington HUD-approved housing counseling agencies: http://1.usa.gov/HjzKVo
Janelle Guthrie, Director of Communications, (360) 586-0725