ATTORNEY GENERAL OF WASHINGTON
1125 Washington Street SE · PO Box 40100 · Olympia WA 98504-0100
May 25, 2012
McKenna: Free help available for Kitsap County homeowners facing foreclosure
State Attorney General warns borrowers to avoid mortgage-related scams
BREMERTON – Al Davis has never piled up credit card bills, avoids lines of credits and even car loans. “I’ve always liked to save for what I want,” Davis this week told a staff member at the Attorney General’s Office.
But careful financial practices didn’t protect Al from being affected by the mortgage woes that have plagued the country and the state in recent years. Davis’s recession-battered employer, a local contractor, closed its doors in 2010. Then major heart surgery left him with more than $10,000 in out-of-pocket expenses. He found work but for much less pay. He started to miss some of the mortgage payments on his Bremerton home. Offers of help – for a fee – started to arrive after he received a foreclosure notice.
“They were coming left and right,” said Davis. “By mail, e-mail – any form of contact they could come up with.”
Washington State Attorney General Rob McKenna warns consumers about these kinds of offers. He says questionable operators scour public records to find foreclosure notices and then blanket struggling borrowers with deceptive offers.
“Unfortunately, there are many individuals and businesses trying to take advantage of people who are about to lose their homes,” said McKenna. “Do not accept offers of help that come with a price tag. Al did the right thing and contacted one of the many non-profits standing by to provide free help. That’s what we encourage others to do, too.”
McKenna was in town promoting the Washington Homeownership Information Hotline,which connects struggling borrowers with counselors, such as those at American Financial Solutions. The Bremerton non-profit helped Davis renegotiate his loan, saving him about $300 a month – enough to give him a shot at keeping his home. They also helped Bremerton’s Lighton Frazier, who ran into trouble when her family’s income dropped.
“I was in a very desperate situation,” said Fraizer. “We applied for a modification four times. Each time it took months and each time we were rejected.”
American Financial Solutions helped save her about $450 a month through a loan modification. “We receive calls on a daily basis from borrowers dealing with a bunch of financial challenges all at once – job losses, overdue credit card bills and mortgage rates that are adjusting up,” said Barbara Mascarin, Director of Operations of the non-profit’s Bremerton office. “We want people to know they’re not alone and that help is available.”
McKenna used funds from settlements with mortgage lenders to help fund the Washington Homeownership Information Hotline. He says stories like Davis’s and Fraizer’s 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.
“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.”
McKenna’s office distributed $600,000 from a 2008 settlement with Countrywide/Bank of America and $550,000 from the Wachovia Wells Fargo settlement to assist the Washington State Homeownership Hotline. The service provides homeowners with HUD-approved counselors who walk borrowers through the process of finding out if their homes may be saved.
McKenna warns that if a consumer faces foreclosure or the risk of foreclosure:
Dan Sytman, AGO Deputy Communications Director, (360) 586-7842