IL: Attorney General Proposes Legislation Against “Mortgage Foreclosure Rescuers”
IL Attorney General Lisa Madigan is taking steps to halt what she calls “a cancer that is eating away at our neighborhoods”. Today, she announced legislation to prevent two types of mortgage rescue fraud. Additionally, the AG’s office will be filing two lawsuits against Home Savers USA and Advantage Mortgage Consulting to help individual homeowners whose circumstances might have been prevented by the proposed legislation.
Madigan and several state representatives are proposing legislation that would prevent consultants from fleecing homeowners by requiring that: consultants provide homeowners with a written contract laying out all the services to be performed; a right to cancel at any time before all services have been performed contract clause; and a clause stating that the consultant cannot receive any compensation until all services have been performed in full.
The second part of the proposed legislation deals with so-called “distressed property purchasers”. In this particular scenario, con artists get homeowners to sign over the deed to their property by telling them they can stay in their home and pay rent until they are back on their feet financially. Then, they can repurchase their home. Many homeowners who enter into these deals believe that they are getting help to catch up on their payments. Unknowingly, they are selling their home to a third party.
Ironically, the homeowners receive little financial benefit from the agreement and more often then not, they end up making higher rental payments then what their original mortgage payment was. The so-called “rescuer” uses a variety of methods to strip the home of its equity and leaves the homeowner facing increasing financial distress, and eventually, eviction.