Wednesday, September 05, 2007
Massachusetts Places Permanent Ban on Foreclosure Rescue
Attorney General Martha Coakley has filed a regulation with the Secretary of State’s Office that permanently bans for-profit foreclosure rescue transactions in the Commonwealth. The Massachusetts Consumer Protection Act authorizes the Attorney General to promulgate regulations to identify unfair or deceptive conduct that violates the act. The new regulation prohibits predatory, for-profit foreclosure rescue transactions. Foreclosure rescue transactions between family members or arranged by a non-profit community or housing organization are not banned under this regulation. The new regulation also makes it an unfair or deceptive act to market foreclosure-related services without a precise description of how the promoter will assist persons in avoiding or delaying foreclosure. The regulations define a “Foreclosure Rescue Transaction” as a transaction designed to avoid foreclosure and where the homeowner transferring the property maintains an option to reacquire the home by maintaining a legal interest in the home.
“Our office is pleased that this regulation is now permanent,” said Attorney General Martha Coakley. “We are one step closer to ensuring that distressed homeowners are protected from unscrupulous business practices.”
On June 1st, Attorney General Coakley announced emergency regulations that placed a temporary ban on these types of unfair and deceptive foreclosure rescue schemes as part of her multi-faceted plan to address the foreclosure rescue crisis in Massachusetts. The regulations went into effect immediately and were valid for 90-days. After a public hearing held on Thursday, August 30, in Boston, the regulations were promulgated as final.
Foreclosure rescue schemes are typically initiated when businesses or professionals claim to assist consumers who are facing foreclosure by convincing them to convey their property to straw purchasers. The straw purchasers then obtain mortgage loans, permitting the individuals facing foreclosure to continue living in their property for a limited time, and promising the individuals that they will be able to later reacquire their homes. In the enforcement matters litigated by the Attorney General, the promises of maintaining home ownership are illusory and homeowners lose their home to the so-called “rescuer.”
In addition, Attorney General Coakley announced earlier this month regulations to address unfair and deceptive tactics used in the mortgage industry. Hearings will be held across the state on the proposed regulations during September. The Attorney General’s Office anticipates that final promulgation of these regulations will occur by the end of September 2007.
mortgage fraud
I believe we need to, as lenders and those responsible for fraud detection and prevention, carefully examine this type of transaction regardless of the laws of our state. I have not encountered any “foreclosure bail-outs” where there was a straw buyer nor where the previous homeowner was being allowed to stay in the home but I have seen a few where it seemed the current homeowner, in my opinion, could have struck a much better deal in their favor. In those cases I have spoken directly to the seller to make sure they understood what they were doing. It is not our duty as lenders to keep the seller from making an uninformed sale but I believe it is our obligation as good neighbors. Our investor clients disagree.
Posted by on 09/07 at 05:41 AM
Do you guys think this is a good thing or a bad thing for those in foreclosure, and those investing in foreclosures? NuWire just did an article that pointed out both points of view on the Mass. foreclosure rescue ban, and I was curious what your opinion was on it?
Posted by on 09/11 at 01:01 PM
Post a Comment
The trackback URL for this entry is:
Trackbacks:
|
Some Sources require Registration.
Mortgage Fraud: Beware the Wolf (Loan Officer) in Sheep's Clothing
24-7PressRelease.com - USA
US consumers looking to refinance their homes or to secure a home loan to purchase their dream homes would be well advised to educate themselves...
Internet Scammer Sells Cape Coral Residential Lot For $18,000
The News-Press - Fort Myers, FL
Because she had title insurance, Kunda will probably get back her money from the 2007 purchase, but the incident highlights cracks in the real estate market and the risk from international scammers who are growing more sophisticated.
Prosecutors Busy With Fraud Cases
Daytona Beach News-Journal - Daytona Beach, FL
The U.S. Justice Department has formed more than 40 mortgage fraud task forces nationwide as prosecutors and investigators struggle with a flood of mortgage-related criminal cases. The FBI reports that its mortgage-fraud caseload has more than doubled in three years to about 1,600 investigations that have cost lenders at least $4 billion. About 200 FBI agents are assigned to the cases, up from 120 a year ago.
Yanchek may take plea deal
Herald Tribune
Sarasota attorney John Yanchek is expected to plead guilty to mortgage fraud next week, statements from a federal prosecutor and the judge presiding over the high-profile criminal case seem to indicate.
Bear Stearns Execs Trial Slated for September
News Inferno
Two former Bear Stearns hedge fund executives are slated to go to trial in September over charges that they lied to investors about two of the funds they managed
Rockford, Chicago lead state in mortgage fraud
Rockford Register Star
Reported incidents of mortgage fraud grew by 45 percent in the second quarter compared with the year-ago period.
Report Finds Tampa No. 2 In Florida For Iffy Mortgages
Tampa Bay Online
In a state that leads the nation in mortgage fraud, Tampa had the second most cases of suspicious loan activity of any Florida city, according to a report released this morning from the Reston, Va.-based Mortgage Asset Research Institute.
Mortgage Fraud Jumps by 45% on Fewer Loan Applications in U.S., Per... MARI
Cloud Computing Journal
Key findings from the MARI Quarterly Fraud Report include that fraud most often occurs at the beginning of the loan process. More than 65 percent of fraud incidents are attributed to "General Application Misrepresentation"
Seven Are Accused Of Identity Theft And Mortage Fraud
The Star Ledger, New Jersey
Seven people have been arrested in connection with an international identity-theft scheme that targeted home equity lines of credit and siphoned at least $2.5 million away from dozens of banks, including more than 10 in New Jersey, according to documents unsealed today.
Suthers Cracks Down On Mortgage Fraud
Rocky Mountain News - Denver, CO
Suther’s office also indicted 10 individuals last March in an $11 million mortgage fraud ring involving 34 local properties...Several other investigations of mortgage fraud are ongoing.
Previous Articles
|
Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
U.S. v. Miller, et al.
Thursday, December, 18, 2008
Verdict:
F. Jeffrey Miller Guilty of Conspiracy and Money Laundering
Steven Vanatta Guilty of Conspiracy , Money Laundering and Bank Fraud
Hallie Irvin Guilty of Conspiracy , Money Laundering and Bank Fraud
Sandra Jo Harris Not guilty- all counts
More Trial Coverage
|
|
|
|
|
|
|