As the real estate meltdown affects more and more Portland-area families, local agencies are working to educate homeowners about foreclosure and mortgage scams.
Consumer complaints about moneylenders and collection agencies have bubbled to the top in the Oregon Department of Justice Top 10 Consumer Complaint Annual Report for 2009.
The list is a compilation of the number of written complaints the department receives in the preceding year. This year the top four are, in order: telecommunications companies, financial institutions, consumer scams and collection agencies.
In addition, 132 Oregonians reported losing a total of $1.2 million in international money transfer scams in 2008.
Last week Attorney General John Kroger met with state Sen. Suzanne Bonamici, and Rep. Paul Holvey, Consumer Protection Committee chairs, to outline ideas for protecting consumers. The trio urged the passage of important pieces of legislation that would help keep consumers in their homes and protect them from illegal debt collectors.
"Laws that protect consumers from unfair business practices are even more important in difficult economic times," Bonamici said in a statement.
Also this week, the Portland Police Bureau's East Precinct hosted Richard Hagar, national expert on real estate and mortgage fraud, for a town meeting designed to help educate the public on how to identify and avoid fraudulent real estate transactions. Hagar also held a training for housing advocates on how to spot fraud.
Police officials say that nationally, real estate and mortgage fraud is rising to unprecedented levels, affecting local economies and neighborhood home values.
Police officials say fraudulent transactions by real estate professionals are also fueling foreclosure rates and the sub-prime meltdown.
Topics at the bureau's meeting included Foreclosure Rescue & Mortgage Elimination Schemes, Predatory Lending, Adjustable Rate Mortgages, Cash Back at Closing, Where to Complain and Which Agencies will Help.
Attendees were invited to meet representatives from the Oregon Division of Finance and Corporate Securities, Portland Police Bureau, and local government officials.
Oregonians facing foreclosure should beware of offers to modify their mortgage loan or find a loan modification for a fee, the Oregon Department of Consumer and Business Services and Department of Justice warns. Some companies charge upfront fees for services homeowners can get for free by visiting a nonprofit counselor or by talking directly with their lender.
"Unfortunately, there are scammers trying to take advantage of the current economic situation and charge consumers unnecessarily," said Cory Streisinger, director of the Department of Consumer and Business Services. "Homeowners can also get the help they need for free from a nonprofit counselor certified by the U.S. Department of Housing and Urban Development."
Loan modification companies recently have been targeting homeowners in Oregon through fliers, direct mail, and phone calls. Typically, the companies charge a fee to negotiate a change in the borrower's loan, such as deferred payments. In some cases, the borrower does not receive the services he or she paid for. In other cases, the borrower receives the services, but could have gotten the same result for no charge from a nonprofit counselor or by dealing directly with their lender.
Homeowners who believe they have been taken advantage of by a loan modification company should file a complaint with the Attorney General's Office. Contact the Attorney General's consumer hotline at 1-877-877-9392. Justice is online at www.doj.state.or.us. Written complaints can be sent to Financial Fraud/Consumer Protection Section, 1162 Court St. NE, Salem, OR 97301-4096.
To find a nonprofit foreclosure counselor in your area, call 1-800-SAFENET.
Earlier this week Attorney General Kroger joined with state agencies, law enforcement, elected officials, advocacy groups and Oregon citizens to announce the Oregon Scam Alert Network, a coalition designed to educate local communities about fraud operations. Citizens can sign up to receive notifications through the Oregon Scam Alert Network at www.doj.state.or.u
Attorney General Kroger recommends the following steps to address consumer scams:
Passage of SB 328
Illegal debt collection complaints have grown 16 percent in just the past year. Part of the reason complaints are so high is that in Oregon, there is currently no state agency able to enforce violations of the Unlawful Debt Collection Practices Act. SB 328, which passed the Oregon State Senate 23-6 with bi-partisan support, would give the Attorney General the authority to hold debt collection agencies accountable when they break the law.
Expand the Oregon Scam Alert Network
According to the Federal Trade Commission, scam artists are likely to be using the economic downturn to take advantage of consumers who may be financially vulnerable. Expanding and improving the Oregon Scam Alert Network to make sure consumers have the resources they need to protect their pocketbooks. Oregonians can sign up for the Oregon Scam Alert Network at http://www.doj.state.or.us.
Register with the National Do Not Call Registry
Telemarketing complaints returned to the list after State enforcement was effectively pre-empted by federal law and regulations since 2003. Oregonians are urged to register with the National Do Not Call Registry by calling 1-888-382-1222 or online at www.donotcall.gov. Registration is free and, after 31 days, most "cold calls" made to Oregonians on the list, with few exemptions, will violate both federal and state laws. Oregonians on the list can then report violators to the Attorney General's office for prosecution.