Attorney General Also Warns of Foreclosure Scams
(OTTUMWA, Iowa) As a record number of Iowans face foreclosure, Iowa Attorney General Tom Miller reminds them that one free phone call could be the difference between saving their home and losing it.
According to an August 27 report released by the Mortgage Bankers Association, Iowa’s foreclosure rate rose to 2.82 percent in the second quarter, up from 2.49 percent the same time last year and 2.77 percent in the first quarter.
“These numbers show that the mortgage crisis persists and continues to threaten Iowa homeowners, their families and communities, and Iowa’s economy,” said Attorney General Tom Miller. “Iowans need to remember that there’s a place they can turn to for help.”
Iowa Mortgage Help Hotline
In February of 2008 a $1.5 million federal grant helped Attorney General Tom Miller launch the Iowa Mortgage Help Hotline, which helps Iowans facing foreclosure. “The Hotline clearly works,” Miller said. “It’s one of the first and most effective programs of its kind in the nation. It’s still one of the very best ways a homeowner who faces mortgage trouble can keep their home.”
Since it began in 2008, the Iowa Mortgage Help Hotline has fielded more than 11,000 calls for mortgage assistance (2/27/08-8/3/10). 82 percent of those seeking help have defaulted on their mortgage, and 41 percent are in foreclosure. Nearly a third of the calls to Iowa Mortgage Help Hotline (29%) resulted in a positive outcome, where the homeowner stays in their home or successfully sells the home. A quarter of the cases (25%) resulted in counseling with no interaction with the lender or servicer. A third (33%) are still in negotiations with a lender or servicer. 13% result in the loss of the home or bankruptcy, or the person seeking help withdrew their request.
The Iowa Mortgage Help Hotline has been a highly successful partnership with the Iowa Finance Authority, Iowa Home Ownership Education Project (IHOEP), Iowa Mediation Service, Iowa Legal Aid, and local housing counseling non-profits located throughout the state. The program emphasizes loan modifications (where interest rates are reduced or other charges are made to the loan terms to help the borrower).
Iowans who face mortgage problems should call the toll-free Iowa Mortgage Help Hotline at 877-622-4866 on weekdays from 8:30 a.m. to 5 p.m., or visit the website at www.IowaMortgageHelp.com. Homeowners can also go in person to one of the housing counseling agencies located throughout the state and listed at the website. The available assistance includes counseling, negotiation of loan modifications, and other forms of loss mitigation. The support is free, confidential, and open to all Iowa homeowners.
When Iowans call the hotline, operators will gather basic data and will refer the callers’ cases to one of the local counseling agencies around the state that are part of Iowa Mortgage Help. The certified counselors then will gather more in-depth financial information and will determine the level of counseling that is needed.
If a caller’s situation only requires fairly basic counseling, such as help with managing personal finances, the case will be handled by the local counseling agency. If a caller’s situation is more complex – and requires interaction with the mortgage servicer or lender – the caller likely will go back and work with Iowa Mediation Service to facilitate a loan modification, if possible.
“Iowans should call the Hotline as soon as they realize they’re in financial trouble or may be headed down that path,” Miller said. “One free call could save your home. Give us a call and we’ll fight as hard as we can to save it.”
Foreclosure Rescue Scams
While Miller urges Iowans to seek help from the Iowa Mortgage Help Hotline, he warns Iowans about so-called “mortgage help” companies that may actually be mortgage rescue scams where companies charge illegal up-front fees.
“Iowans should stay away from companies promising loan modifications and charging upfront fees,” Miller said. “No legitimate company will ask you to pay anything, much less thousands of dollars, to help save your home.”
The Consumer Protection Division has received numerous complaints from families who were conned into paying more than $1,000 to companies that promised to help them obtain a loan modification and avoid foreclosure, but did little or nothing to help. Iowans cheated by a loan modification scam should contact the Consumer Protection Division at 888-777-4590 outside of the Des Moines area, or at 515-281-5926 in the Des Moines metro area. Iowans can also file complaints online through the Iowa Attorney General website at www.IowaAttorneyGeneral.gov or can e-mail a complaint directly at email@example.com.
Other Attorney General Efforts Helping Homeowners
In 2008 Miller proposed legislation to regulate companies and individuals who solicit consumers with promises of helping them avoid foreclosure. The Iowa legislature passed that law, which now makes it illegal for companies and individuals to ask for or accept money in advance of providing these services.
Since that law passed, Miller’s office has issued 17 civil subpoenas to companies and individuals offering “mortgage foreclosure rescue” services. Last year the Attorney General obtained a settlement with one “mortgage rescue” company and successfully sued another to require compliance with a civil subpoena.
In 2010, the Attorney General’s Consumer Protection Division recovered or saved 69 Iowa homeowners nearly $2.4 million dollars. These efforts include recovering or obtaining refunds of mortgage fees or costs, savings on foreclosure fees and costs, and loan modifications.
Help for Homeowners Facing Foreclosure Event
Central Iowans facing a possible home foreclosure can also get help at a free event on Thursday, September 9, from 6-9 p.m. at the East Des Moines Event Center at 2550 E. Euclid Ave. The event is called “A Safe Path to Keeping Your Home: Avoiding Foreclosure Scams! Accessing Help!” For more information, call 515-278-1415 or go to www.ihoep.com.
There are also simultaneous events in Cedar Rapids and Council Bluffs:
Horizons, A Family Service Alliance
819 5th Street, SE
More information: 319-398-3576
Public Library, Room D
400 Willow Avenue
More information: 402-333-8609, x315
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