Protecting Homeowners
By Bill MimsThe number of home foreclosures in Virginia rose from 24,000 in 2007 to 68,000 last year. As of December 2008, about 20 percent of all homeowners nationwide owed more on their house than its current market value.
These economic realities breed those who wish to prey on homeowners. Reports of such unscrupulous persons posing as mortgage loan modification or foreclosure prevention companies have risen across the nation in recent years.
The last thing distressed Virginians need is to be misled by opportunists.
In a phony counseling scam, someone tells you that he can help you negotiate a workout deal or refinancing with your lender if you pay him first. In the end, they take your money and do nothing.
Our office worked to craft new laws – which go into effect July 1 – to protect homeowners. One such law will amend the Virginia Consumer Protection Act to make it clear that mortgage foreclosure operators are not permitted to charge advance fees for mortgage foreclosure prevention transactions.
Homeowners can protect themselves by avoiding a business that:
- guarantees it can stop the foreclosure process, no matter what your circumstances
- instructs you not to contact your lender, lawyer or credit counselor
- collects a fee before providing any services
- requires you to make mortgage payments to it as opposed to your lender or servicer
All Virginians facing foreclosure are encouraged to work directly with your lender or servicer to see whether a loan modification, or other relief, is possible. Virginians also may consult with a HUD-approved foreclosure avoidance counselor, or in the alternative, the Homeownership Preservation Foundation’s HOPE Hotline, toll-free at 1-888-995-HOPE.
Consumer protection is an important statutory duty of the Office of the Attorney General, and our staff can help. In an age of increased consumer issues, we all must continue to be educated and vigilant.
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