Florida Attorney General Warns About Mod Loan Scam

Attorney General Bill McCollum News Release
March 3, 2009
Media Contact: Sandi Copes
Phone: (850) 245-0150
Floridians Should Avoid Being Scammed By Foreclosure “Rescue,” Loan Modification Offers
~ Homeowners encouraged to look for warning signs, avoid common scams ~
TALLAHASSEE, FL – Attorney General Bill McCollum today issued a consumer advisory as
part of National Consumer Protection Week on foreclosure “rescue” services and loan
modification offers, the most frequent subject of complaints to the Attorney General’s
Office during 2008. Within the last year, the Attorney General’s has reviewed information on
over 200 foreclosure rescue businesses and has over 40 active investigations into potential
violations of Florida’s Foreclosure Rescue Fraud Prevention Act, a new law supported last
year by the Attorney General. Several lawsuits have been filed throughout the state,
including one against a South Florida company which allegedly defrauded several hundred
homeowners out of more than $1 million collectively.

“Today, homeowners are being bombarded with advertising from companies claiming they
can save homes, reduce mortgage payments, and many other offers,” said Attorney General
McCollum. “Florida homeowners need to be very cautious and should know that Florida
law prohibits any company or individual from charging up-front fees for foreclosure rescue
or loan modification services.”

The Attorney General urged homeowners facing foreclosure or mortgage payments in
default to contact their lenders directly before reaching out to a third party. Consumers also
should avoid any business that seeks to charge for services related to the new Homeowner Affordability and Stability Plan initiated by the President. Lenders and mortgage servicers can provide information about negotiating a new payment schedule or about homeowners’ eligibility for loan modification under the new federal plan. Services under this initiative will be provided at no cost to consumers; more information about the Homeowner Affordability and Stability Plan is available at http://www.financialstability.gov/.

The Attorney General also offered the following tips to identify and avoid a potential foreclosure rescue scam:
– Avoid businesses that guarantee to save homes from foreclosure or stop the foreclosure
process “no matter what the circumstances.”

– Do not work with businesses or individuals who instruct homeowners not to contact their
lenders, lawyers or financial counselors and to make mortgage payments directly to the
business or individual.

– Avoid businesses that use names or symbols which mimic federal and state programs or
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falsely suggest they offer legal services or are affiliated with an attorney or law firm.

– Before doing business with any loan modification business, check it out fully. Get its
physical address, ask for the names of its corporate officers, and call the Attorney General’s Office to determine whether it has any complaints reported against it.

Consumers who wish to file a complaint may do so by calling the Attorney General’s fraud
hotline at 1-866-9-NO-SCAM (1-866-966-7226) or by filing a complaint online at
http://myfloridalegal.com. Additional information about National Consumer Protection Week is available at http://www.consumer.gov/ncpw

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