Miller: “Beware of foreclosure rescue scams. If you need help, call the free Iowa Mortgage Help Hotline at 877-622-4866.”
A Georgia company called “Guaranteed Loan Modifications Inc.” must completely stop offering any “foreclosure prevention” services in Iowa and must refund hundreds of dollars to an Iowa consumer.
“This company broke a new Iowa law that prohibits ‘mortgage-rescue’ schemes from taking any payments in advance for so-called help in preventing foreclosures,” said Attorney General Tom Miller. “Guaranteed Loan demanded $1,270 in up-front fees and received $635 before providing any service, and that’s illegal in Iowa now,” Miller said.
Miller urged Iowans to call the free Iowa Mortgage Help Hotline at 877-622-4866 if they are facing foreclosure or having trouble making mortgage payments. The Hotline is sponsored by the Attorney General’s Office and the Iowa Finance Authority, and it offers free, confidential help from trained housing counselors. The web site is www.IowaMortgageHelp.com.
Miller said the legal action against Guaranteed Loans was part of an effort in Iowa and nationwide to fight back against “foreclosure rescue scams” that have mushroomed in the wake of the mortgage crisis and economic downturn. “Operation Loan Lies” against such scams was announced today by the U.S. Federal Trade Commission (FTC) and many states, including Iowa.
“Mortgage foreclosure rescue scams ask you to pay hundreds of dollars up-front for so-called assistance or rescue from foreclosure,” Miller said, “but they just take your money and do nothing to help. The scam puts you deeper into a financial hole, does nothing to save your home, and diverts you from getting the real help you need,” he said.
“It’s ironic that foreclosure rescue scams charge advance fees for purported services that are available free from the Mortgage Help Hotline sponsored by our office,” Miller said.
“Call the Hotline at 877-622-4866 instead of falling for a scam,” he said. “This free call could save your home.”
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More information – “Operation Loan Lies” and legal action in Iowa.
The FTC and dozens of states today announced actions against “foreclosure rescue scams.” In Iowa, Guaranteed Loan Modifications was investigated by the Attorney General’s Consumer Protection Division for violating Iowa Code Ch. 714E which was enacted last year to regulate “foreclosure consultants” – and thwart scams. Guaranteed Loan violated the law by taking payments in advance, failing to disclose terms of service, and failing to provide required notice of consumers’ right to cancel. The company must make refunds and must not operate in Iowa. [Go to Guaranteed Loan Modifications Inc. Assurance of Voluntary Compliance.]
In a separate action, the Consumer Protection Division has gone to court against “Homeownership Protection Education Alliance, Inc.,” based out of Tampa, FL, a company also suspected of violating the law prohibiting charging in advance for so-called foreclosure prevention assistance. The action alleges the company has failed to cooperate with the state’s investigation, as required by law. The “Application to Enforce a Civil Investigative Demand” asks the court to order the company to cooperate with the investigation – or to ban and penalize the company if it fails to cooperate. [Go to Application to Enforce.]
Warning signs of “foreclosure rescue scams.”
Miller said foreclosure rescue scams are rampant, and prey on desperate people in difficult economic times.
“Beware if someone contacts you, claims they can help, and asks you to pay an up-front fee,” Miller said. “They might contact you by phone, mail, e-mail, or even come to your door, because information about people facing foreclosure is included in public court records,” he said.
“Beware if someone claims to have a ‘special relationship’ with your lender or ‘servicer.’ Beware if they tell you not to talk to your lender or servicer directly. That’s exactly what you should do – talk to your lender, and go ahead and call the free Mortgage Help Hotline,” he said.
“And beware if someone asks for up-front payment. It is illegal in Iowa to charge an up-front fee, and no legitimate company will ask you to pay hundreds of dollars in advance,” Miller said. Iowa Code Ch. 714E, proposed by Miller’s office and enacted last year, prohibits companies from taking up-front fees for so-called foreclosure-prevention services.
Miller encouraged Iowans to contact his office if they have been cheated by a “rescue scam.” The toll-free number is 888-777-4590. In Des Moines call 515-281-5926.
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