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Van Hollen & State Agencies Join FTC in Targeting Loan Modification Schemes That Prey on Wisconsin Homeowners

WI Cases Part of National Operation Stolen Hope

 

MADISON - Attorney General J.B. Van Hollen today joined federal and state officials to crack down on loan modification and foreclosure relief scams, including against two California-based companies that took money from distressed Wisconsin homeowners.

 

"Wisconsin continues to have zero tolerance for these so-called rescue schemes," Van Hollen said.  "They rob residents who are already struggling to make their mortgage payments.  They help themselves to homeowners' money but don't help homeowners at all."

 

The national sweep, Operation Stolen Hope, is comprised of a joint effort between the Federal Trade Commission, the U.S. Department of Justice and over 20 state Attorneys General.   The Wisconsin Department of Justice works closely with the Wisconsin Department of Financial Institutions and Department of Trade and Consumer Protection in investigating loan modification and foreclosure rescue scams.

 

As part of the crackdown, Van Hollen filed suit last week against California company, Federal Loan Modification Law Center, LLP.  He recently filed suit against another California company, 21st Century Legal Services, Inc.  Both suits were filed in Dane County circuit court and are being handled by Assistant Attorney General Nelle Rohlich.

In each action, the Attorney General alleges the companies promised to help homeowners negotiate lower mortgage payments to save their homes from foreclosure.  Instead, the companies took upfront fees but did little or nothing to help homeowners.  The lawsuits allege the companies misrepresented themselves as government-sponsored programs and incredibly, in some cases told consumers to stop making mortgage payments so it would be "easier" to get  loan modifications. 

 

Under Wisconsin law, it is illegal to charge an upfront fee for foreclosure or loan modification assistance.  The Wisconsin Department of Financial Institutions requires anyone engaged in such activity to be licensed with the agency.

 

Van Hollen used Operation Stolen Hope as a reminder of the dangers of loan modification and foreclosure rescue scams.  "I cannot emphasize enough to beware of anyone  promising to help save your home," said Van Hollen. "Don't waste your time and money on anyone who charges an upfront fee for foreclosure or modification help. Stay in touch with your lender.  Real foreclosure help is available for free."
 

Homeowners who believe they have been a victim of a loan modification or foreclosure rescue fraud should file a complaint with the Wisconsin Department of Agriculture, Trade and Consumer Protection and the Wisconsin Department of Financial Institutions at:

 

Department of Agriculture, Trade and Consumer Protection

Consumer Protection Hotline
1-800-422-7128
File your complaint online.

 

Department of Financial Institutions
(608) 261-9555
File your complaint online.

 

For Free Help:
Contact a HUD approved counselor.

Contact the federal "Making Home Affordable" program to check on your eligibility for assistance.

 

Legitimate foreclosure assistance counseling is available at no cost from non-profit agencies throughout Wisconsin and nationally through the HOPE line (1-888-995-HOPE). The Federal Trade Commission has useful information to avoid rescue and modification scams:

http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea16.shtm