Scam alert: Don’t pay for help with your home loan

Underwater or facing foreclosure? Distressed homeowners in our state are about to get $600 million thanks to a settlement with the nation’s five largest banks. But the Attorney General’s office warns scammers are sure to be following the news.

“Don’t pay for something you can get for free,” says Washington’s Senior Assistant Attorney General Doug Walsh, who heads up the Attorney General’s Consumer Protection Division.

Walsh warns homeowners to steer clear of con artists who promise to help speed up loan modifications or principal reductions, for a fee.

“We’ve seen people in this housing crisis give $3,000 to $5,000 and get absolutely nothing in return and certainly nothing they couldn’t have gotten for calling an 800 number,” Walsh says.

Walsh encourages distressed homeowners to call their bank directly or a special hotline set up by the Attorney General’s Office, 877-894-Home. There is also a dedicated website with resources to help navigate loan modifications for free.

The settlement stems from investigations finding the country’s five largest loan servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.

The settlement provides assistance for borrowers who lost their homes to foreclosure, are underwater, or need a loan modification immediately.

Walsh says homeowners who need help should only deal with a HUD-approved counselor.

“They know everything you need to know. They’re objective, they’re on your side, and they’re going to help you navigate the rocks and shoals of these programs,” Walsh says.