For Immediate Release
Media Contact: Bob Cooper
Date: November 24, 2009
Idaho Joins Operation Stolen Hope
(Boise) - Attorney General Lawrence Wasden joined the Federal Trade Commission and 26 other state and federal regulatory agencies in Operation Stolen Hope, a nationwide enforcement and consumer education effort to combat foreclosure rescue fraud.
“This year we’ve received more complaints about companies that offer mortgage modification services than any other type of business,” Attorney General Wasden said. “We are pursuing lawsuits against two of these companies and have opened investigations into others. While these legal actions may provide some relief to homeowners who have been victimized, I hope Idahoans facing foreclosure will avoid these problems by reading the free publications available from my office.”
Wasden recently filed a lawsuit against a Kootenai County mortgage modification company, APS Northwest Idaho LLC, for numerous violations of the Idaho Consumer Protection Act. A similar lawsuit against Coeur d’Alene based Apply 2 Save is pending, although the now-closed company is in bankruptcy. The Attorney General also reached a separate settlement with a former Apply 2 Save executive.
In addition, Wasden’s Consumer Protection Division has ongoing investigations of other Idaho and out-of-state companies that have generated consumer complaints. These companies typically advertise through direct mail solicitations or on the Internet and claim an ability to help a homeowner take advantage of special government programs, stop a pending foreclosure or modify a mortgage by lowering the homeowner’s interest rate or payment. Before these companies begin any work, they require payment of a large upfront fee.
Idaho law prohibits mortgage loan modifiers from charging certain upfront fees for their services. The Idaho Department of Finance enforces the Idaho Residential Practices Act, which requires licensing of individuals who offer mortgage loan modification services. The Department maintains a list of licensees on its website.
“Most of the time, the people operating modification companies are unqualified and unlicensed, with no experience in the mortgage industry,” Wasden said. “Even if their initial intentions are noble, they soon discover they cannot fulfill the promises they made to consumers. Inevitably, the company closes or files bankruptcy, and homeowners are left in a worse position than before they contacted the company.”
Wasden urged homeowners who are experiencing difficulties paying their mortgage to contact their mortgage servicer immediately. The Attorney General added that homeowners who have difficulty negotiating a modification should consult a local nonprofit housing counselor without cost to the homeowner. HUD-approved housing counselors are located throughout Idaho and provide free assistance to homeowners facing foreclosure. The Attorney General also employs a part-time counselor to assist Idaho consumers with their mortgage-related questions.
Wasden’s office recently published two new handbooks for consumers. The free brochures are available on Wasden’s website or by calling (208) 334–2424 or toll–free in Idaho at (800) 432–3545.
Foreclosure Prevention and Foreclosure Scams: How to Tell the Difference walks consumers through the foreclosure process and provides detailed information about how to get free assistance with mortgage modification and about current federal programs to assist homeowners facing foreclosure. The manual also describes common foreclosure rescue scams and tells consumers how to identify and avoid foreclosure fraud.
Buying a Home contains information about preparing to buy a home, finding an appropriate loan, required information disclosures and legal safeguards, and state and federal laws aimed at protecting home buyers. The handbook also contains a section on mortgage fraud, including common fraudulent schemes and how to avoid them.
Additional information about avoiding foreclosure and maintaining sound financial health is available from the Idaho Department of Finance or by contacting the Department at (208) 332–8000 or toll–free in Idaho at (888) 346–3378.
Attorney General Wasden encouraged consumers to report foreclosure rescue fraud to his office’s Consumer Protection Division and to the Department of Finance. Complaint forms are available on each agency’s website or by calling and requesting a form from the agencies.
- End -