Deal on North Carolina Foreclosures May Result in Fraud

March 15, 2012

A nationwide mortgage settlement between the country’s five biggest banks and attorneys general from 49 states is expected to yield some $340 million in assistance for homeowners who are either underwater on their properties or endured an improper foreclosures in North Carolina.

This could be good news for many in North Carolina, but our North Carolina foreclosure attorneys know it certainly doesn’t mark the end of this housing crisis. Many questions still loom about exactly how effective this settlement will be and whether politics played a larger role than practicality. But there is no doubt about the fact that the settlement won’t come close to helping the vast majority of struggling homeowners. In many cases, the $2,000 a homeowner may be eligible for won’t even cover the cost of relocating.

And, unfortunately, people who are already embroiled deep in debt are now at risk of being scammed.

According to NewsChannel 36, the state’s attorney general, Roy Cooper, has voiced concern that con artists may try to take advantage of news of this settlement to get their foot in the door with people and ask for their bank account information.  In our experience, this is common.  When consumers are in desperate situations, the con artists come out in droves.

In fact, the attorney general’s office in Virginia has already reported that such scams are happening there. Thieves are contacting people, claiming to be calling on behalf of the government regarding the settlement. The scammers then go on to tell those they are calling that they are eligible to receive settlement money – but they’ll need to fork over their bank account information to get the money.

So far, no North Carolina consumers have reported being victimized – at least not by scammers. Banks may be a different story.

As the NC attorney general’s office points out on its web site, it is actually too early to know who will be eligible. The $25 billion settlement involves a host of different parties, and the settlement hasn’t even yet been formally filed – so many of the details haven’t been made public yet.

The attorney general’s website indicates that payments will be made to victims of a false foreclosures in North Carolina if the foreclosure happened between Jan. 1, 2008 and Dec. 31, 2011. It would come in the form of a one-time, lump sum.

Those who are eligible will be contacted by either the settlement administrator or their mortgage servicer in the coming months. It’s not yet clear how these entities intend to verify their identities, but it is important to never give personal or account information over the phone.  Have them send everything in writing, and verify with whom you are working.

If you are concerned that this may happen, you can feel free to call the state attorney general’s office directly at either or at 1-877-5-NO-SCAM.

North Carolina, which is the 10th largest state in the country, ranked 36th  of 50 in terms of the number of foreclosures. The settlement was brought about because a number of mortgage providers and banks pushed through foreclosures without proving that they had the right to do so. The documents were rubber-stamped without verification of signatures – and banks took other unethical or fraudulent actions in seizing real estate.  For more information, read our recent blog on the Robo-signing scandal.

Consult The North Carolina foreclosure defense attorneys at Soboleski Law, P.C. for more information.  We can also be reached at 828-285-8888.

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