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MADISON — National Consumer Protection Week begins this Sunday, March 4, 2012. This week also marks an important step in providing relief for many Wisconsinites who have suffered abuses of the mortgage foreclosure process.
This week, Wisconsin expects to join 48 other states and several federal agencies by officially filing the $25 billion settlement that was announced a few weeks ago with the country's five largest residential mortgage servicers -- Ally Bank (formerly GMAC), Bank of America, Citi, JPMorgan Chase and Wells Fargo. The settlement follows a national investigation into foreclosure abuses and addresses the abuses by, among other things: prohibiting “robo-signing,” or the mass signing of documents by an employee who has not verified the contents of them; prohibiting the banks from pursuing foreclosure while simultaneously working with homeowners to refinance their loans, a practice called “dual tracking;” requiring the banks to be more transparent in their efforts to prevent foreclosure, called “loss mitigation,” and to respond to consumers in a timely fashion and to identify a contact person who can assist the consumer; establishing an independent monitor to oversee the banks' compliance with the settlement; and requiring the banks to pay approximately $25 billion. The vast majority of the $25 billion will be directed to homeowners who were victims of abusive foreclosure practices or who qualify for measures to prevent foreclosure, such as loan forbearance, principal write-downs or refinancing.
Those eligible for possible payments or other forms of mortgage relief under the settlement include borrowers of the five banks who lost their home to foreclosure in the last five years, and borrowers currently at risk of foreclosure because they are behind on payments or have a mortgage that exceeds the value their home. The banks are responsible for identifying and contacting those eligible for relief under this settlement, which may take up to nine months. If you have questions about eligibility, you should contact your bank. Contact information for the banks included in this settlement is available at http://www.doj.state.wi.us/.
The Wisconsin Department of Justice (DOJ) has set up a hotline (1-800-998-0700, or 608-266-1852) for callers to report if they are having problems with the banks. You also may email the DOJ at firstname.lastname@example.org.
The settlement does not restrict the rights of individual consumers to pursue legal action against the banks. My office, along with other attorneys general across the county, will continue to investigate the practices of other banks which are not part of this settlement, as well as conduct not covered by this settlement.
Beware of scams. Scam artists may attempt to contact homeowners offering to help them receive part of the national mortgage settlement. Homeowners will be contacted directly by their banks or the settlement administrator if they are eligible to participate. The help being offered as a part of this settlement is free of charge. You will never have to pay a fee or a percentage to be considered for eligibility. If you are contacted by anyone other than your bank, the settlement administrator or the Wisconsin Attorney General's Office regarding this settlement, please contact the DOJ Office of Consumer Protection (1-800-998-0700), or the Department of Agriculture, Trade and Consumer Protection (“DATCP” 1-800-422-7128). Additional information about the settlement is available at: http://www.nationalmortgagesettlement.com/.