Tuesday, February 07, 2006

Foreclosure Scams A 'Cottage Industry'

State lawmakers are waking up to the housing bubble. "Though they’ve whiffed on past attempts, an advocate for homeowners and the poor says majority Republicans this time are pushing for mortgage-industry oversight that would give Ohio consumers some real protection. A revised bill to be unveiled today is expected to place mortgage brokers and certain lenders under the Consumer Sales Practices Act, which would allow home buyers to sue the bad apples of the industry and give the state attorney general more power to go after them."

"The wide-ranging bill is expected to call for home appraisers to be licensed, and beef up anti-coercion measures to prevent lenders and brokers from influencing those who deter- mine a property’s value."

"Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, said Senate Republicans finally have been persuaded that current law does not offer home buyers enough protection from misleading practices such as predatory lending. 'They tried those other approaches, listening largely to the industry. The reality is, it didn’t work,' Faith said, noting his group had far more input in the changes this time around. 'I think they realize that not enough was done.'"

"Colorado Attorney General John Suthers is cracking down on real estate investors who prey on financially strapped Coloradans in danger of losing their homes through foreclosure. Suthers testified Monday on behalf of Senate Bill 71, a measure his office backs that would make it a crime to take a person's home through deceptive and fraudulent lending practices."

"'Over the last several years, foreclosure rescue scams have become a cottage industry,' Suthers said. 'With foreclosure at near-record levels..we're also seeing a record number of complaints of heavy handed and deceptive practices by individuals determined to take advantage of distressed homeowners and claim for themselves the hard-earned equity in their homes.'"

"But real estate investors and mortgage brokers argued that the bill will harm the real estate industry and could drive up the state's foreclosure rate."

"The push to crack down comes on the heels of several high-profile scams, one that led to the eviction of 100 families. Local attorney John Head testified he represented 20 homeowners who lost their homes in a scam. They quit-claim deeded their homes to an investor, who evicted them, sold the houses and stole the equity."

"'These foreclosure operations prey on people who are emotionally connected to their homes and have plenty of equity,' Head said. 'By the time they get to them, they're desperate to try to save their home.'"

"Four Mecklenburg County legislators will sit on a special committee investigating foreclosures in North Carolina. The 19-member House committee is charged with determining how the state can reduce foreclosures."

"Its creation follows a three-day Observer series showing that rising numbers of foreclosures in Mecklenburg and around North Carolina are hurting homeowners and damaging neighborhoods."


At 9:21 PM, Blogger Martha Bridegam said...

Is any of this reform effort specific to reverse mortgages? I'm working on a new consumer-oriented reverse mortgage blog called "Move or Stay?" and I'm amazed at the number and eagerness of shady marketers trolling for customers in this area.


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