Massachusetts Attorney General Makes Temporary Foreclosure Rescue Scam Ban Permanent
Over the last couple of months, Foreclosure-Fighter has detailed how the current foreclosure crisis has intensified in part due to the rise of foreclosure rescue scams.
With that said, Massachusetts Attorney General Martha Coakley recently banned foreclosure rescue scams in the state.
As part of her effort to go after unscrupulous people taking advantage of homeowners who desperately need to stop foreclosure, Coakley has specifically targeted one type of foreclosure rescue scam.
Coakley has permanently prohibited foreclosure rescue scams in which individuals or businesses promise to stop foreclosure after convincing the desperate homeowner to “temporarily” transfer ownership of the property to them.
Why would a homeowner, even one facing the most desperate of circumstances, agree to transfer ownership of his or her property? Well, to begin with, these individuals or businesses posing as mortgage foreclosure rescuers lure homeowners into believing that they will get their homes back in time.
In reality, these scammers typically sell the acquired properties and strip the homes of all equity. Consequently, people who were once worried about losing their home to foreclosure are left without a home to worry about and little to no equity.
After initially imposing a temporary ban on such Massachusetts foreclosure rescue scams in June, Coakley made the ban permanent on August 31st.
Coakley was described in a Boston Herald story as saying that it’s time to put an end to scammers who prey on the emotions of distressed homeowners who are looking to stop foreclosure via any means possible.
Coakley also imposed temporary regulations back in June that made it illegal for mortgage companies to boost borrower’s incomes on loan applications and restricted lenders from providing loans to borrowers who do not disclose their full income. The Boston Herald story reported that Coakley is currently deciding whether to make these temporary bans permanent. Coakley’s office has filed three foreclosure rescue scam lawsuits involving 46 homeowners in the last year.
With that said, Coakley’s permanent ban on foreclosure rescues includes a few exceptions. As an example, the foreclosure rescue scams ban will not affect foreclosure rescue plans offered by nonprofit or housing organizations or family members of the desperate homeowner.
Short sales will also not be affected by this permanent Massachusetts foreclosure rescue scheme ban. A short sale typically involves a homeowner selling his or her house for less than its worth and then negotiating a smaller settlement on the leftover balance with the mortgage lender.
Overall, Coakley’s foreclosure rescue scheme ban comes at a time in which Massachusetts foreclosures continue to shoot the roof. The story indicated that the state is currently on pace to break the Massachusetts foreclosure record of 19,487 foreclosures, which was dubiously achieved in 2006.