Consumer - Mortgage Foreclosure

To better understand the mortgage foreclosure process, here are some definitions of important terms:

  • Foreclosure – A foreclosure is the process by which your noteholder (e.g., the entity that owns your mortgage) can reclaim your home and/or land if you fail to make timely mortgage payments. Once your home has been foreclosed upon, you no longer have ownership rights in your home or your land, and your loan servicer can insist that you leave.  

  • Servicer – Your loan servicer is the company that typically is responsible for collecting your loan payments for the benefit of your noteholder. Your loan servicer is the first party you should contact with questions or concerns about your mortgage or mortgage payments.

  • Term – The term of your mortgage refers to how long you are required to make payments (e.g., 15, 20 or 30 years). Typically, the longer the term of your mortgage, the more you will pay in interest over the life of your loan.

The prospect of losing your home to foreclosure certainly would be a terrifying experience.  In the event you are having trouble keeping up with your mortgage payments, here are several suggestions to help avoid foreclosure. 
Communicate with your loan servicer. Be sure to speak with your servicer and let them know you are having trouble making payments. Some servicers will work with borrowers to help them avoid foreclosure by modifying loan terms to make their payments more affordable. If you ignore the problem, it almost certainly will make it worse. When discussing your loan with your servicer, be sure to do the following:

  • Before you speak with your servicer, write down the specific problems you are having with your loan. What caused you to have difficulty in keeping up with your payments? Is the problem permanent or temporary? What solution would you like to reach?

  • During the foreclosure prevention process, be sure to document all discussions you have with your servicer (e.g., write down the date, the name of the individual you spoke with, and the outcome of your call).  Additionally, be sure to follow-up all telephone requests with a letter to your servicer. Finally, be sure to meet all deadlines provided to you during the process. 

Know your mortgage. Review your loan documents to determine your rights and obligations under your mortgage. If you can’t find answers to your questions by reading your mortgage documents, contact your servicer and ask. Your loan servicer is the party responsible for collecting your mortgage payments.

Be sure to at least find the answers to these questions:

  • How much do I owe on my mortgage? 

  • What is the full term of the mortgage? The longer the loan payment period, the more you will pay in interest over the life of the loan.

  • Is my interest rate fixed or adjustable?

    • If you have a fixed rate mortgage, this means your interest rate will stay the same over the life of the loan. 

    • If you have an adjustable rate mortgage (commonly referred to as an A.R.M.), this means your interest rate can (and likely will) change and possibly increase substantially over the life of the loan. If you have an adjustable rate mortgage, you may wish to try to refinance to a fixed rate mortgage, if possible. 

  • Is there a balloon payment on my mortgage? A balloon payment mortgage is a mortgage which does not fully amortize over the term of the note and leaves a balance due at maturity. The final payment of your loan that typically is larger than your other payments and is called a balloon payment. If you have a balloon payment on your loan and cannot make this payment or refinance your home, you may lose your home to foreclosure.

  • Does my loan contain a prepayment penalty? Some loans contain penalties that require you to pay a fee if you pay off your loan early.   This means that even if you try to refinance to a lower (or fixed) rate, your noteholder could require you to pay this penalty.  

Be wary of potential scams. There always are people willing to take advantage of desperate individuals to make an easy profit. Never sign a legal document without reading it and being sure that you understand it. If you do not understand something, it is wise to seek trusted professional advice from an attorney or a HUD-approved counselor. (See “More Information” below for details on HUD)

Be cautious of claims by individuals or businesses that they can “rescue” you and help you remain current on your mortgage. If an offer to help sounds too good to be true, it probably is. The most common mortgage foreclosure scams you should watch out for include:

  • “Mortgage Foreclosure Prevention Specialists”: Some scammers promise to help you make phone calls or complete paperwork, in exchange for an exorbitant fee. Often times, these are simple tasks that can be completed by the homeowner, without cost.

  • Lease-Buyback Scams: On some occasions, scammers will convince, or encourage, homeowners to transfer the deeds to their homes. Some of these transfers are disguised as lease/buyback transactions where the homeowner is promised he or she will be able to remain in the home on a lease term, and eventually buy it back. The terms of these agreements often make it far more difficult to re-acquire ownership of your home. 

  • Bait-and-Switch: In this type of scam, scammers trick unknowing homeowners into transferring the deeds to their homes. Typically, the scammer will convince the homeowner that he or she is signing documents to “bring their mortgage current.” In reality, the homeowner is signing documents to transfer ownership of their home to the scammer.

Consider selling your home without foreclosure. Sometimes, servicers will delay foreclosure proceedings if you have put your home on the market. If your home is less valuable than the amount of your loan, your servicer may allow you to sell your home at a loss, and forgive the rest of the loan (you could, however, owe income tax if you choose to go this route and should consult your tax advisor).
More Information:

  • The U.S. Department of Housing and Urban Development’s (HUD) Web site provides resources and information for homeowners having difficulty repaying their mortgages and contains a list of HUD-approved credit counseling agencies, which are available to help discuss options to help you avoid foreclosure.

  • The Federal Trade Commission’s (FTC) Web site. The FTC is the federal agency that advances consumers’ interests through education and industry regulation and enforcement. The site contains a wealth of information regarding the mortgage foreclosure crisis and other issues that consumers face everyday.  

  • Housing Opportunities Made Equal’s (H.O.M.E.) Website H.O.M.E. is a Virginia non-profit organization that was founded in 1971 to fight discrimination in housing. Among other things, it provides educational materials for, and assistance to, individuals who are facing foreclosure or are victims of predatory lending practices.

  • If you need the services of an attorney in Virginia, the Virginia State Bar (VSB) sponsors a service called the Virginia Lawyer Referral Service. If you are referred to an attorney through this service, you are entitled to an initial consultation with the attorney for up to 30 minutes for no more than $35. You may contact the VSB by writing to: Virginia State Bar, 707 East Main Street, Suite 1500, Richmond, Va. 23219-2800. Their nationwide toll-free number is 1-800-552-7977. Additional information about this service is available on the VSB Web site at: http://www.vsb.org/site/public/lawyer-referral-service/

  • If you cannot afford the services of an attorney, you may qualify for legal aid. Legal aid offices are nonprofit organizations that provide free legal advice and representation to low-income individuals. You may qualify for legal aid if you meet certain low-income thresholds, which typically are linked to federal poverty guidelines. For more information, contact your local legal aid office. You can check the phone book through the alphabetical listings for “legal clinics” or “legal aid,” etc. A statewide directory of legal aid offices is on the Virginia Legal Aid website.

 

 

 

 

 

Consumer - Lemon Law

What do I do if I think my car is a lemon?

Virginia does have a "Lemon Law."  It is called the Virginia Motor Vehicle Warranty Enforcement Act. 

Read Virginia’s "Lemon Law" Statute

This law establishes a “lemon law” rights period”ending 18 months after the date of the vehicle’s original delivery to the consumer.  The provisions of Virginia's “Lemon Law” are enforceable by private action brought by the consumer, not by a governmental agency. 

Can my used car be considered a lemon?

Under certain conditions, the “Lemon Law” may apply to used vehicles. The Virginia Supreme Court case that dealt with application of the “Lemon Law” to a used vehicle is Subaru of America, Inc. v. Peters, 256 Va. 43, 500 S.E.2d 803 (1998). 

Where to File a Complaint:

Better Business Bureau (BBB):

If you would like to utilize dispute resolution programs in connection with potential “lemon law” claims, you may wish to contact the Better Business Bureau (BBB).  The BBB administers the BBB Auto Line® Program which is a dispute resolution program to settle automotive warranty disputes as an alternative to court.  The BBB Auto Line® Program handles complaints against most vehicle manufacturers. 

Office of the Attorney General of Virginia

Some manufacturers do not participate in the BBB Auto Line® Program in certain states.  Our office handles “lemon law” complaints against several vehicle manufacturers that do not participate in the BBB Program. When a complaint is filed with our Office the goal is to attempt to assist the parties in reaching an amicable resolution; however, if the parties are unsuccessful in reaching a resolution through the dispute resolution process the consumer may need to further pursue the “lemon law” complaint through the appropriate court. 

Virginia State Bar Lawyer Referral Service

If you desire legal advice about how the Lemon Law applies to your situation, you may want to contact the Virginia State Bar’s Lawyer Referral Service (VLRS) to obtain the name of a private attorney that is a member in good standing that will consult with you for up to one half hour for a prepaid consult fee of $35.  

For complete information on VLRS, please visit www.vlrs.net or by calling toll-free Monday through Friday between the hours of 9am – 5pm.

Statewide and Nationwide Toll-Free Number: (800) 552-7977
Metro Richmond: (804) 775-0808

 

 

 

 

Identity Theft

Identity theft continues to be one of the fastest growing crimes in the United States.  In 2008, identity theft complaints made up twenty-six percent (26%) of all fraud complaints in the United States.  Currently, Virginia ranks 22nd in the nation in the total number of known victims of identity theft.  Technological advances have created an information revolution that has transformed government, business, commerce, education and communication.  Unfortunately, the increased use of computers has also increased opportunities for criminal activity.  Our Computer Crime Section receives reports about identity thieves and con artists every day who use technology as a tool to perpetrate crimes. 

In Virginia, identity theft is a serious crime.  Currently, an identity thief whose crime results in financial loss up to $200 faces a misdemeanor conviction and confinement for not more than 12 months and/or a maximum fine of $2,500.  An identity thief, whose crime results in financial loss greater than $200, faces a felony conviction and a term of imprisonment of not less than one year nor more than five years.  For more details, please refer to §18.2-186.3 of the Code of Virginia.

What do I do if I believe I am the victim of Identity Theft?

First contact your local police or sheriff’s department and file a criminal complaint.  Next, you should contact one of the three credit bureaus:  EquifaxExperian or Trans Union, to notify them that you believe you are a victim of an identity crime and to request that a fraud alert be placed on your credit report.  Please feel free to contact this Office or your local Commonwealth’s Attorney for assistance in prosecuting identity theft cases.

If you fall victim to identity theft while using the Internet, you should file a report with the Internet Crime Complaint Center (IC3).  This is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C).  Its mission is to receive, develop and refer criminal complaints regarding the rapidly expanding area of cybercrime.

Our Office is dedicated to assisting all Virginians to avoid becoming victims of an identity crime and providing them with the necessary knowledge in order that they may be proactive should they become a victim of identity theft.  In that effort, we have published a booklet "How To Avoid Identity Theft – A Guide for Victims" (PDF 54Mb)  which includes helpful advice to avoid falling victim to identity theft as well as providing victims with information on the specific steps they can take when they become a victim of identity theft. You may print a copy of this booklet by clicking on the link above, or request a hard copy by emailing us at This email address is being protected from spambots. You need JavaScript enabled to view it..

The Identity Theft Affidavit is available to you if you are involved in a dispute regarding fraudulent debts and accounts opened by an identity thief.  Rather than completing several different forms, you can use the Identity Theft Affidavit to alert businesses to the fraudulent accounts opened in your name.  The company can then investigate the fraud and decide the outcome of your claim.  The Identity Theft Affidavit is located at the back of the booklet, "How to Avoid Identity Theft – A Guide for Victims". You can also download the Identity Theft Affidavit individually.

The Federal Trade Commission (FTC) is also actively involved in fighting identity theft. You may find it helpful to visit the Federal Trade Commission’s website found at www.ftc.gov for more information.

Where can I order a copy of my credit report?

Federal law requires that each of the three credit bureaus (EquifaxExperian and Trans Union) provide one free credit report per year to individuals upon request.  You may order your free credit report from each of the three bureaus at the Annual Credit Report website.

What is the Attorney General's Identity Theft Passport?

The Identity Theft Passport is a card that you can carry and present to law enforcement or other individuals who may challenge you about your identity should you become the victim of identity crime.  

How can the Identity Theft Passport Help Me?

The Passport is designed to serve as notification to help protect victims from unlawful detention or arrest for crimes committed by another under a stolen identity.

How do I get an Identity Theft Passport?

An Identity Theft Passport may be available to any Virginian who:

Has filed a police report because they believe they are a victim of identity crime; and/or has obtained a court order expunging their record as a result of identity crime

You may download a PDF version of the application for an Identity Theft Passport. You can then print, complete, sign and mail to this Office; OR

You may write to this Office for an application for an Identity Theft Passport:

Office of the Attorney General
Computer Crime Section

202 North Ninth Street
Richmond, VA 23219

All applications must be submitted in person or by mail and will be acted upon promptly.

 

 

 

 

Consumer - Free Annual Credit Report    

Want a Free Annual Credit Report?  The ONLY Official Website is annualcreditreport.com

The federal Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.  The three companies have set up one central website, toll free telephone number and mailing address through which you can order your free credit report.  The Federal Trade Commission (FTC) wants you to know that if you want to order your free annual credit report online, there is only one authorized website: annualcreditreport.com. 

FTC's Free Credit Report Information

** Warning About “Imposter” Websites Offering Free Credit Reports
** Beware of other websites that look and sound similar! 
Other websites that claim to offer “free credit reports,” “free credit scores” or “free credit monitoring” are not part of the legally mandated free annual credit report program. In some cases, the “free” product comes with strings attached. For example, some sites sign you up for a supposedly “free” service that converts to one you have to pay for after a trial period. If you don’t cancel during the trial period, you may be unwittingly agreeing to let the company start charging fees to your credit card. 

Annualcreditreport.com and the nationwide consumer reporting companies will not send you an email asking for your personal information.
If you get an email, see a pop-up ad, or get a phone call from someone claiming to be from annualcreditreport.com or any of the three nationwide consumer reporting companies, do not reply or click on any link in the message. It’s probably a scam. Forward any such email to the FTC: This email address is being protected from spambots. You need JavaScript enabled to view it.