Attorney General Bill Schuette has highlighted the work of his Homeowner Protection Unit to secure more than $1.6 million in restitution for victims of mortgage fraud-related crimes and offered important tips to help Michigan consumers avoid becoming victims of foreclosure rescue scams. The advice is issued as part of Schuette’s commitment to educate the public during National Crime Victim Rights’ Week.
“We have secured more than $1.6 million in restitution for Michigan victims of mortgage foreclosure-related crimes to help them begin to rebuild their lives,” said Schuette. “We will continue to aggressively investigate allegations of criminal misconduct by mortgage foreclosure scammers and advocate for Michigan homeowners.”
The Attorney General Homeowner Protection Unit has received restitution orders in the amount of $1,642,157 for approximately 843 victims. The Homeowner Protection Unit Reimbursement Fund has distributed a total of $301,776 to victims of mortgage fraud-related crimes who would otherwise receive no compensation, since the criminals who already spend their money are currently incarcerated. Since 2010, a total of 36 persons and companies have been convicted for committing mortgage fraud-related crimes. Several of the worst offenders were prosecuted for Racketeering resulting in prison sentences up 40 years.
“Consumers should take note of our important Consumer Alert to successfully stay on guard against fraud and protect their loved ones from additional financial hardship,” said Schuette.
Consumer Alert: Foreclosure and Credit Assistance
The national foreclosure crisis has severely impacted Michigan homeowners. As a result, law enforcement has witnessed a dramatic rise in the number of unscrupulous businesses and con artists who promised to help consumers keep their homes. Schuette’s office and federal officials have warned of scam artists who prey on the vulnerability of desperate homeowners in order to collect handsome fees — but don’t deliver any of the promised services. Many of these shady operations engage in high-pressure sales tactics and demand substantial fees in advance however; Michigan’s Credit Services Act (CSA) prohibits collecting fees in advance when seeking to negotiate a loan on behalf of a homeowner. Violating the CSA 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.
Schuette notes consumers should consider the following five suggestions to avoid foreclosure rescue fraud:
Homeowners are not required to pay to speak with their lender or servicer.
Homeowners seeking foreclosure assistance may call the Michigan State Housing Development Authority for free advice at 866-946-7432.
Never pay up front for help with negotiating your loan or working with your servicer.
If you believe you may be a victim of mortgage fraud or foreclosure rescue fraud, call the Attorney General’s office toll-free at 877-765-8388
View Schuette’s Consumer Alert on Foreclosure and Credit Assistance by visiting: http://1.usa.gov/1n8pDZL
Foreclosure Rescue Scam Victim Restitution Fund
In August 2013 Schuette announced the launch of a $7.5 million 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. This program is intended to provide restitution payments for victims of foreclosure scams who would otherwise never see a penny of court-ordered restitution.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.
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.
As of March 2014 Michigan citizens have 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 Snyder signed legislation creating the $97 Million Homeowner Protection Fund.
Additional resources for victims of crime in Michigan can be found at: http://1.usa.gov/QWT7Q6.
Read more about National Crime Victim Rights Week, April 6-12, 2014 from the U.S. Department of Justice: http://1.usa.gov/1qdH0sb.
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