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MN Dept of Commerce Stops Another Scammer

2012-01-10T12:42:26-08:00

A Bloomington firm that offered mortgage modification "help" to homeowners that were struggling with their mortgage payments lost its license this week after allegations of charging illegal up-front fees.

Check out the full story here: http://www.twincities.com/business/ci_19641415

And remember... if you're struggling with mortgage payments... DON'T BECOME A VICTIM. Contact the Minnesota Homeownership Center TODAY for the facts. www.hocmn.org.

Help Us Help Homeowners

2011-01-04T11:47:55-08:00

The Look Before You Leap campaign has produced a new brochure-sized flyer aimed at helping consumers recognize foreclosure rescue scams, and it is available to our campaign partners free of charge.

To receive copies for your brochure display stands, tabling events or to use in an upcoming mailing, please complete the order form and return it to ed@hocmn.org.

FTC Rule Aims to Stop Foreclosure Rescue Scams

2010-12-29T02:30:00-08:00

Under a new Federal Trade Commission (FTC) rule that goes into effect on December 29, 2010, many common tricks of foreclosure rescue scams will now be illegal across the United States. In particular, under this Rule companies offering mortgage modification services must disclose:

They are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
The lender may not agree to change the consumer’s loan; and
If companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating as a result of this action.

Additionally, beginning Jan. 31 mortgage modifications companies are banned from charging up-front fees for their services.

This Rule reinforces the consumer warnings issued by the Look Before You Leap campaign. Read the full press release about this new Rule below.

NEWS RELEASE

For Immediate Release
Dec. 29, 2010

Contact:
Ed Nelson
Ed@hocmn.org
(651) 659-9336 (office)
(651) 491-5131 (cell)

New Federal Trade Commission Rules
Aim to Stop Mortgage Rescue Scams
Federal rules build on Minnesota’s model of homeowner education, legislation

St. Paul, Minn. (Dec. 29, 2010) – The Minnesota Home Ownership Center is applauding new consumer protections issued by the Federal Trade Commission (FTC) aimed at ending mortgage modification scams, which go into effect today. Under the new Mortgage Assistance Relief Services (MARS) Rule, companies are barred from making false promises in their marketing and, beginning Jan. 31, will be prohibited from charging any up-front fees for their services.

“Minnesota homeowners are struggling to balance their mortgages with lost income and other challenges this holiday season. They should not have to be on the lookout for predatory foreclosure rescue scams on top of everything else,” noted Julie Gugin, executive director of the Minnesota Home Ownership Center, which is spearheading the Look Before You Leap campaign. “We applaud the FTC for issuing these consumer protection rules that will make it harder for predatory mortgage scams to operate in Minnesota and across the nation.”

Minnesota has been a leader in protecting homeowners from predatory modification companies, and this FTC rule closely mirrors ongoing work in the state. For example, the Look Before You Leap campaign, which launched in June 2010, engages a network of nearly 100 Minnesota business, nonprofit and government organizations to warn homeowners of the predatory tactics covered in the new FTC rule. The Minnesota legislature passed a 2008 law banning companies from charging up-front fees for loan modifications, which will be nationally replicated under this new rule.

The new rule requires mortgage modification companies to disclose key information to consumers, including:

They are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
The lender may not agree to change the consumer’s loan; and
If companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating as a result of this action.

The Look Before You Leap campaign has, through this public education effort, warned Minnesota homeowners to be on the lookout for companies that:

Charge a fee for their service;
Ask a homeowner to sign over a mortgage title or even power of attorney;
Claim homeowners should stop paying their mortgage as part of the modification process;
Claim homeowners should pay them, rather than their bank or servicer, during the modification process; or
Promise a guaranteed outcome or claims they can help people in any situation.

Minnesota homeowners can access the state’s Homeownership Advisors Network, a coalition of nearly 50 nonprofit organizations. Led by the Minnesota Home Ownership Center and sponsored by Minnesota Housing and other funders, the coalition provides free foreclosure prevention counseling services to Minnesotans. The Network has served approximately 45,000 homeowners since the foreclosure crisis began in 2007.

“The FTC rule is a major step in stopping the number of scamming companies targeting Minnesota homeowners,” added Gugin. “But, ultimately, homeowners need to understand that these predatory companies do exist, and they need to be savvy when seeking outside help for a mortgage modification. That’s why Look Before You Leap is continuing to educate homeowners about these real scams and encouraging them to turn to our Network for help they can trust.”

Homeowners seeking assistance with a loan modification or who are worried about foreclosure are encouraged to contact the Homeownership Advisors Network. Homeowners can connect with a nonprofit counselor in their area at www.LookBeforeYouLeap.org or by calling (866) 462-6466.

Star Tribune Editorial Supports Campaign Principles

2010-07-21T09:59:52-07:00

Homeowners should not pay for help avoiding foreclosure or securing a loan modification. That’s the message of Look Before You Leap, and it’s the message of a July 2 Star Tribune editorial supporting the campaign. With the number of scams reported to federal authorities booming from 1 in 2008 to nearly 8,000 last year, the campaign is working to curb this groundswell of scams and to protect homeowners in Minnesota. To read the full editorial, click here.

Partnerships Are Expanding to Help Homeowners

2010-07-21T09:56:48-07:00

Momentum continues to build in support of the Look Before You Leap campaign and efforts to stop foreclosure scams in Minnesota. Today the campaign announced its 70th partner that has committed to educating its members/customers about the dangers of such scams: the Minnesota Credit Union Association.

Look before leaping to protect against mortgage scams

2010-06-30T06:52:36-07:00

The following editorial appeared in the June 30, 2010 Pioneer Press:

Look before leaping to protect against mortgage scams

Homeowners struggling with the loss of a job, a soaring mortgage payment, declining home value — or all of the above — are at risk for foreclosure. The nation, the state and our community haven't seen this kind of housing stress since the 1930s. Not every mortgage can be 'fixed' short of losing the home. But some can.

In times of financial trial, it's important to know who is trying to help and who is trying to unethically profit from homeowners' misery. "Look before you leap" is good advice in any financial transaction but it is especially pertinent in these times. It is the slogan of a public campaign from those who want to help stressed homeowners, aimed at protecting homeowners from those who want to rip them off.

The Minnesota Home Ownership Center, a nonprofit group that focuses on educating homeowners and counseling those facing foreclosure, is leading the campaign. It is aimed at the booming business of foreclosure "prevention" and loan-modification come-ons that are either full-fledged scams or outfits that charge for services that are widely available for free.

Consider that in 2008, the Federal Trade Commission received one complaint of foreclosure scams. Last year, it received more than 8,000. According to Julie Gugin, executive director of the Minnesota Home Ownership Center, these companies, often with impressive-sounding names, target troubled homeowners through direct mail, Internet pitches and phone calls. She said immigrant communities, where English skills and legal knowledge may be limited, have been "particularly hard hit.''

Gugin said these firms often tailor their pitch to mimic legitimate government programs, creating confusion in the consumer's mind. Tactics include collecting up-front fees, promising outcomes that are never delivered, and even convincing homeowners to sign over their deeds or to accept questionable "reverse mortgage" loans with ballooning fees.

In March, Minnesota Attorney General Lori Swanson filed suit against three out-of-state loan-modification companies, saying they violated a 2009 state law preventing these companies from charging fees before delivering the promised services. Because services to distressed homeowners are offered for free, a request for payment by a loan-modification company should be a red flag to consumers, indicating trouble ahead.

Among the many institutions supporting the "Look Before You Leap" campaign are: TCF Bank and US Bank, the Federal Reserve Bank of Minneapolis, the Minnesota Department of Commerce, the Hmong American Partnership and the Minnesota Association of Realtors. Our community has an interest in preventing foreclosures, and loan-modification scams work against that goal.

We encourage regulators and consumers to be on the lookout for scams in a time of crisis. We encourage consumers to be wary, especially when they are in desperate straits and, therefore, most vulnerable. There is a great difference between a come-on and legitimate counseling. We support "Look Before You Leap" as an effort to pound home the time-honored truism of being very careful before signing up or paying out, especially during hard times.

Those facing the possibility of foreclosure, either now or in the future, can contact the Minnesota Home Ownership Center for a referral to free counseling services. The numbers are 651-659-9336 and 1-866-462-6466 toll-free. (Hit 4 to go to the mortgage assistance line.) Further information is available at www.lookbeforeyouleap.org

Look Before You Leap: Out to quell foreclosure-related scam

2010-06-29T07:01:45-07:00

The following article appeared in today's Star Tribune.

Look Before You Leap: Out to quell foreclosure-related scam

The Look Before You Leap campaign warns of illegitimate loan modification companies. There will be an event at 10:30 a.m. Tuesday on the East Side of St. Paul, one of the areas hardest hit by foreclosure, featuring homeowners who have agreed to share their horror stories.

Patricia Goff got taken not once, but twice, by shoddy loan modification companies promising to fix her mortgage woes for an upfront fee. Neither delivered and now Goff, 47, is facing foreclosure on the Rosemount home where she lives with her husband and 21-year-old son -- unless she comes up with $34,000 -- more than Goff earns in a year. "They dragged my life out and now it's done. It's too late. There's nothing that can be done because we're a year and a half behind on our mortgage," she said.

Continue reading the story here.

Stopping Foreclosure Rescue Scams: Look Before You Leap Launches Today

2010-06-29T06:45:32-07:00

At a community event today in St. Paul’s Payne-Phalen neighborhood, the Minnesota Home Ownership Center launched a new public education and outreach campaign. “Look Before You Leap” is designed to help homeowners identify and avoid loan modification scams in an effort to curb the state’s unprecedented foreclosure rate. The campaign is supported by more than 50 business, nonprofit and local government partners across Minnesota.

Read the entire press release below.

NEWS RELEASE

For Immediate Release
June 29, 2010

Contact:

Julie Gugin
Julie@hocmn.org
(651) 659-9336 (office)

Ed Nelson
Ed@hocmn.org
(651) 659-9336 (office)
(651) 491-5131 (cell)

Statewide Campaign Launches to End Loan Modification Scams, Stem the Tide of Foreclosures

“Look Before You Leap” Empowering Communities, Homeowners to Spot Foreclosure Scams

St. Paul, Minn. (June 29, 2010) – At a community event today in St. Paul’s Payne-Phalen neighborhood, the Minnesota Home Ownership Center launched a new public education and outreach campaign. “Look Before You Leap” is designed to help homeowners identify and avoid loan modification scams in an effort to curb the state’s unprecedented foreclosure rate. The campaign is supported by more than 50 business, nonprofit and local government partners across Minnesota.

Over the next six months, “Look Before You Leap” will focus outreach efforts in the Minnesota communities where mortgage scams and foreclosures continue to mount: in exurban communities; communities with high unemployment rates; among seniors; and within the Latino, Hmong and African American communities. As one of the communities hardest hit by the foreclosure crisis, the campaign chose the Payne-Phalen neighborhood as its kick-off point.

“Foreclosure prevention scams have boomed in the past year, in particular, as federal loan modification rules came into place,” said Julie Gugin, executive director of the Minnesota Home Ownership Center. “These scams cost Minnesotans their homes, their savings or often both. ‘Look Before You Leap’ is bringing together Minnesota business, nonprofit and local government partners to shine a spotlight on these terrible scams and to ensure that the counseling resources this campaign will offer get to those who need it most."

“Look Before You Leap” will call attention to schemes employed by some loan modification companies. Resources will help potential homeowners identify practices by unethical companies that include the following:

Charge fees for their services;

Ask homeowners to sign over title to a home or even power of attorney as part of their work;
Claim that homeowners should stop paying on a mortgage during the loan modification process;
Claim that a homeowner should pay the company, rather than the mortgage holder, during the modification process; or
Promise a guaranteed outcome.

The Minnesota campaign is part of a national initiative called the “Loan Modification Scam Alert,” which aims to end loan modification scams across the country. NeighborWorks America, coordinator of this national campaign, will support the “Look Before You Leap” campaign.

“The number of loan modification scams reported to the Federal Trade Commission jumped from only one in 2008 to nearly 8,000 last year, and that number continues to swell. This campaign is helping homeowners spot these dangerous companies so they don’t fall prey to the costly scams and gimmicks,” added Steve Hermes of NeighborWorks America.

“Many loan modification scam companies can appear legitimate to even the most skeptical untrained eye,” explained Gugin. “Look at the National Loan Modification Association of America, for example. The company claims to be a ‘Better Business Bureau-like’ clearinghouse for loan modification companies, but actually just promotes other scamming for-profit modification companies that it owns. To the average consumer, it looks like they are working with an accredited and legitimate organization but the reality is it’s just another deceptive scam. That’s how these companies work to take homeowners’ money, leaving them with even fewer options to protect their home from foreclosure.”

Homeowners seeking assistance with a loan modification or foreclosure are encouraged to contact the Minnesota Home Ownership Center’s statewide network of nonprofit counselors as an alternative to the scamming companies. These counselors are trained to negotiate with lenders on behalf of homeowners. Homeowners can connect with a nonprofit counselor in their area at www.LookBeforeYouLeap.org or by calling (866) 462-6466.

– ## –

Minnesota Home Ownership Center is a nonprofit organization that promotes successful and sustainable home ownership for low- and moderate-income Minnesotans through counseling and education services for first-time home buyers and those struggling with foreclosure. The Center leads a statewide network of more than 50 nonprofit partners across Minnesota.

NeighborWorks® America creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. Much of our success is achieved through our support of the NeighborWorks® network more than 230 community development organizations working in 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. NeighborWorks® America is the nation’s leading trainer of community development and affordable housing professionals.

Follow us on Facebook and Twitter

2010-06-28T14:42:52-07:00

Look Before You Leap is on Facebook at facebook.com/lookbeforeyouleap and on Twitter twitter.com/lookb4youleap.

Look Before You Leap launches on June 29

2010-06-28T14:35:42-07:00

We're stopping foreclosure prevention scams in Minnesota.