CHARLES TOWN – Attorney General Darrell McGraw has filed a lawsuit against Texas-based firm Murray, LLP, to halt exploitation of consumers who lost homes through foreclosure.
The suit seeks to block Murray from charging fees for benefits from a national mortgage settlement that are intended to be free.
In April, 49 state attorneys general finalized an historic $25 billion settlement with the five largest mortgage servicers, intended to end the abuses that drove tens of thousands of consumers into unjustified foreclosures.
The national mortgage settlement also set aside $1.5 billion for direct payment to consumers who already lost their homes to foreclosure, including 5,222 West Virginia residents.
All benefits under the settlement are free, but some companies have sought to profit from the settlement by misleading consumers into believing they must pay to obtain their checks.
McGraw took action to stop Murray from doing so.
McGraw’s office is suing Murray and four individuals in Jefferson Circuit Court, asking the court to issue an injunction blocking Murray from taking 20 percent of consumers’ money as a fee for completing a simple claim form.
The suit also seeks to block Murray from charging fees for other alleged services relating to wrongful foreclosures.
“This sort of conduct is unacceptable in West Virginia,” McGraw said. “It is my duty to enforce our consumer laws so that consumers who have already lost their homes are not victimized again by a group that charges for a service that was designed to be simple and free.”
McGraw said consumers should not be fooled into thinking anyone can advance their claim because they cannot.
“Consumers with questions about the national mortgage settlement claim process are urged to call my Consumer Protection Hotline for more information,” McGraw said. “All of our services are free.”
McGraw’s suit explained that customized single-page claim forms were sent to 5,222 West Virginia residents who were already determined to be eligible for the expected payment of approximately $1,500 to $2,000.
The forms were designed to be extremely simple and easy to complete. The deadline for claim submission is Jan. 18, 2013. If consumers have questions, they can call a toll-free number on the form for help.
McGraw’s suit alleges that even before the first claim form was sent, the recently created law firm, Murray, registered in San Antonio, Texas, and began marketing its services to foreclosure victims entitled to payment by offering to “push their claim forward” with the settlement administrator for 20 percent of the total payout.
Using a sophisticated nationwide advertising scheme on cable television and its Web site, Murray markets its bogus services to unsuspecting claimants who are led to believe they are hiring an attorney to file their claim and will gain an advantage in the claims process by doing so.
McGraw said that more foreclosure complaints are received from the Eastern Panhandle than any other park of the state.
McGraw’s office has received more than 800 written complaints requesting help with their home loans as part of a “Save Our Homes” initiative launched earlier this year.
McGraw’s office has postponed more than 180 foreclosure sales, allowing time for loan servicers to properly evaluate homeowners’ applications for loan assistance.
Without General McGraw’s intervention, these homes would have been sold before the application review process was completed.
To contact the attorney general’s Eastern Panhandle office in Martinsburg, call 304-267-0239. To report a scam or consumer fraud or to file a complaint, call the Consumer Protection Hotline at 800-368-8808 or visit www.wvago.gov.