 Attorney General Martha Coakley (AP) |
Foreclosure Scheme
Coakley cracks down on
foreclosure schemers
By Jay Fitzgerald found at Boston Herald General Economics
Friday, June 1, 2007
Attorney General Martha Coakley today imposed emergency regulations to crack down on “foreclosure rescue” schemers who have been accused of cheating homeowners out of their properties.
The regulations, coming amid a surge of foreclosures across the state, would bar so-called “rescuers” from making profits on homeowners struggling to pay their sky-high mortgage payments.
“Rescue” schemes often involve companies taking over homes of those facing foreclosure, but also stripping the equity out through “inflated mortgages” and fees for dubious services. One tactic has involved persuading homeowners faced with foreclosure to “temporarily” sign over their home in exchange for financial assistance, which may never arrive.
The new regulations do not apply to non-profit groups or family members who step in to try to help people burdened with huge mortgages, often obtained through subprime lenders.
Coakley, whose office has been battling companies that offer complex transactions claiming to lessen the financial pressure of mortgages, said the regulations are effective today and valid for 90 days.
The regulations could become permanent after public hearings are held.
Coakley’s office vowed to review and possibly implement other reforms to deal with the foreclosure “crisis” gripping the state.
“These ‘rescuers’ take a bad situation - foreclosure - and make it worse by liquidating any remaining equity in the homes,” Coakley said in a statement
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