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Schuette Secures $114,542 for Victims of Mortgage Rescue Fraud

Contact: Joy Yearout 517-373-8060

March 14, 2014  

LANSING Attorney General Bill Schuette today announced $114,542 will be distributed from the Homeowner Protection Fund by his Corporate Oversight Division to more than 112 victims of the Hope4Homeowners mortgage rescue scam.

"These funds will help victims of the mortgage foreclosure cases we've prosecuted get their money back, when they would otherwise be left with nothing," said Schuette.

"Homeownership is a fundamental part of the American dream. We will continue to aggressively investigate allegations of criminal misconduct by mortgage foreclosure scammers and advocate for Michigan families."

Michigan law prohibits "foreclosure rescue" companies, which provide foreclosure advice, from making misleading or false statements, or charging service fees before any service is completed.

Schuette's predecessor, Attorney General Mike Cox, initiated criminal charges against Help4Homeowners, an Oakland County mortgage rescue scheme, in 2009. Help4Homewoners was convicted on three counts of violating Michigan's Credit Services Act in Oakland's 48th District Court before Judge Kim Small.

The charges against Help4Homeowners resulted from Attorney General investigation based on homeowner complaints. Help4Homeowners was charged with three counts of violating Michigan's Credit Services Act (CSA). The CSA prohibits charging fees before completing services when seeking to negotiate a loan on behalf of a homeowner. The Credit Services Act carries a maximum penalty of 90 days in jail and/or $1,000 fine, and allows the Attorney General's office to seek restitution for affected consumers.

Misleading or false statements made by the companies included guarantees to prevent foreclosure and assertions consumers could avoid foreclosure regardless of their credit score, home appraisal, or debt to income ratio. Victims were charged between $595 and $3,000.

 Reimbursement checks will be processed for more than 112 victims of Help4Homeowners from the Homeowner Protection Fund by Schuette's Corporate Oversight Division.

Schuette encourages consumers who may have been a victim of Help4Homeowners to contact his Corporate Oversight Division at 877-765-8388.

Schuette notes consumers should consider the following four suggestions to avoid foreclosure rescue fraud:

  • Homeowners seeking foreclosure assistance may call the Michigan State Housing Development Authority for free advice at 866-946-7432.

  • Homeowners are not required to pay to speak with their lender or servicer.

  • Never pay up front for help with negotiating your loan or working with your servicer.

  • If you believe you may be a victim or mortgage fraud or foreclosure rescue fraud, call the Attorney General's office toll-free at 877-765-8388

Mortgage Settlement and Homeowner Protection Fund Background

 

            The historic National Mortgage Settlement followed state and federal investigations, which alleged that the five mortgage servicers routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct.  This civil law enforcement action also alleged that the servicers committed widespread errors and abuses in their foreclosure processes. Broad reform of the mortgage servicing process resulted from the settlement, as well as financial relief for borrowers still in their homes through direct loan modification relief, including principal reduction.

 

            Michigan citizens received approximately $803 million in benefits from the settlement. The State of Michigan also received a direct payment of $97 million from the servicers.  Schuette worked with the legislature and Governor Rick Snyder to establish the Michigan Homeowner Protection Fund to ensure these funds are directed toward victims of foreclosure. On August 1, 2013, Governor Rick Snyder signed legislation creating the $97 Million Homeowner Protection Fund. 

Highlighting the $7.5 Million Foreclosure Rescue Scam Victim Restitution Fund

In August, 2013 Schuette announced the launch of a Foreclosure Rescue Scam Victim Restitution fund as a part of the Homeowner Protection Fund monies received by the State of Michigan to resolve the National Mortgage Settlement.  Many Michigan residents have fallen prey to foreclosure rescue scam artists who offered to help citizens save their homes. This program is intended to provide restitution payments for victims of foreclosure scams.

            To read more about the additional programs under the Homeowner Protection Fund, visit: http://1.usa.gov/1oQJCvt. For more information on the mortgage settlement, including a consumer alert and a Frequently Asked Questions document available for download, visit www.michigan.gov/mortgagesettlement  

 

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