AG Lynch to eligible RI consumers of Countrywide’s shady sub-prime mortgage practices: Your checks are coming

Providence, RI – January 22, 2010 – (RealEstateRama) — Attorney General Patrick C. Lynch is alerting Rhode Island consumers who qualified for a portion of the $547,000 in foreclosure relief funds resulting from his office’s settlement with Countrywide Financial Corp. that their checks are scheduled to be mailed to them on Feb. 12. 

Lynch said that as of now, 186 Rhode Island consumers who had qualifying adjustable rate mortgages and who were foreclosed upon by Countrywide will share the foreclosure relief funds —— amounting to approximately $1,800 for each harmed consumer. The amount each consumer will get could increase, however, because the Attorney General’s office has not been able to locate 33 qualifying Rhode Island consumers despite repeated efforts.

Rust Consulting, a Minnesota-based firm that is the administrator of the settlement, which Lynch announced last July, is sending the checks. Rust Consulting notified eligible consumers in July and also is managing payment processing of the foreclosure relief funds that Lynch’s settlement guarantees.

“I’m alerting all Rhode Island consumers who are waiting for their checks to carefully check each piece of mail they receive around February 12,” Lynch said. “Don’t mistake an envelope from Rust Consulting for junk mail, because each check to each consumer will arrive in an envelope bearing the name and the return address of the settlement administrator.”

Lynch’s office learned that a number of consumers who were not familiar with Rust Consulting tossed the claims forms mailed to them last July in the trash, and Lynch is alerting consumers not to make the mistake of tossing their checks away.

“We’ve received a number of calls from families desperate to receive the settlement money and I want to assure them that their checks will be arriving in a few short weeks,” Lynch said. “Although the money can in no way make up for Countrywide’s deceptive practices that misled them into agreeing to mortgages they could not afford, it does deliver some relief to Countrywide borrowers in our state who lost their homes.”

Lynch recently announced that he would be submitting a bill in this session of the Legislature to create a new mortgage-fraud statute through which a resulting criminal offense would allow the state to vigorously prosecute dishonest mortgage industry practitioners who target and prey on at-risk homeowners. Lynch’s bill will address a variety of fraudulent acts in connection with home mortgages, from fraudulent appraisals and sales contracts to fraudulent representation of financial information by a purchaser obtaining a mortgage. The resulting crime would be a felony.