New protections from foreclosure in NC
AG Cooper backed new law to save homes and communities, stop harassment from debt buyers
Raleigh: North Carolinians who face the loss of their homes through foreclosure or harassment from unfair debt collectors now have new protections under the law, Attorney General Roy Cooper said Thursday.
The Consumer Economic Protection Act of 2009 (CEPA), which Cooper worked with state legislators to enact, will ensure that homeowners and their mortgage lenders have the chance to voluntarily resolve foreclosures. The new law, which starts today, will also protect consumers from an aggressive new breed of debt collectors called debt buyers.
“Losing a home should be a last resort because foreclosures hurt thw whole economy,” Cooper said. “With this new law, homeowners and lenders get more time to rework mortgages so that more families can afford to stay in their homes.”
Court records show that nearly 40,000 North Carolina homes have gone into foreclosure so far in 2009. According to the Center for Responsible Lending, more than 2.2 million North Carolina homeowners will see their property values decline over the next three years because of foreclosures in their neighborhood. Foreclosures hurt lenders as well, costing them an estimated 40 percent of the loan value.
Not all foreclosures can be prevented, but some homeowners are able to work out repayment plans and loan modifications with their mortgage lender or servicer. CEPA requires lenders to explain in detail their efforts to resolve delinquent home loans without resorting to foreclosure. Clerks of Court presiding over a foreclosure hearing now have the authority to ask what steps have been taken to prevent foreclosure and to continue the hearing for up to 60 days to allow homeowners and lenders more time to negotiate a solution.
To give homeowners a fair opportunity to appeal foreclosure orders, CEPA also standardizes the amount of bond required at one percent of the balance due on the loan. Previously, some homeowners were asked to put up a bond worth the entire value of the loan balance in order to be able to appeal their foreclosure.
For free counseling on options to avoid foreclosure, North Carolina homeowners can call a toll-free hotline set up by the NC Commissioner of Banks’ Office. The hotline, 1-866-234-4857, is available from 8:00 AM to 9:00 PM Monday through Friday, and from 8:00 AM to 5:00 PM on Saturdays.
The new law also protects North Carolina consumers from unfair debt collection practices by debt buyers, a new type of debt collector that pursues old debts even when the debts have already been settled or paid.
For example, a debt buyer sued a 65-year-old North Carolina woman, producing billing statements supposedly sent to her at an address in Greensboro. But the consumer, who has lived in the same house for more than 30 years, had never lived in Greensboro.
In another case, a 73-year-old North Carolinian received daily calls from a debt buyer, telling her that she would never be able to buy anything if she didn’t pay them. The account the debt buyer was trying to collect was opened in Ohio, and the woman had never set foot in Ohio. A criminal had stolen her identity years before and been prosecuted and convicted for it, but the debt buyer still filed suit against her over the debt that wasn’t hers.
Under the new law, debt buyers must now prove that they have the right to enforce the debt and be able to verify the amount owed. Debt buyers are also prohibited from filing or threatening to file suit when barred by the statute of limitations.
“Whether you’re a senior on a fixed income or a working family trying to make ends meet, the last thing you need is someone hounding you to pay a debt that you don’t really owe,” Cooper said.
A provision in the original legislation that would have clarified the Attorney General’s Office’s enforcement over investment scams involving securities will be pursued in the next legislative session.
Ex-Cowboys linebacker arrested in mortgage scam
Associated Press |Sept. 3, 2009, 2:52PM
DALLAS — Former Dallas Cowboys linebacker Eugene Lockhart was arrested Thursday after he was indicted with eight others in an alleged mortgage fraud scheme that swindled more than $20 million from several home lenders, federal officials said.
The U.S. Attorney’s Office said Lockhart and the others made 54 fraudulent loan closings for single-family homes in the Dallas area that totaled about $20.5 million. The scheme started in February 2001 and involved obtaining loans to buy distressed or pre-forclosure properties sold at inflated prices. The defendants kept the surplus loan proceeds, according to the federal indictment.
Authorities allege the group recruited “straw” buyers and purchasers and doctored financial statements so the lender would approve the loans.
“The people involved are escrow officers, appraisers, title companies … the gamut of real estate,” said FBI spokesman Mark White. “That’s usually how these things work. It takes somebody in every single area to get this thing to work.”
The indictment charges Lockhart, 48, of Carrollton, with one count of conspiracy to commit bank fraud and wire fraud and one count of wire fraud.
Lockhart was involved with several real estate businesses, including America’s Team Mortgage, America’s Team Realty, Cowboys Realty and KLT Properties, according to the indictment. He’s accused of collaborating with the eight others to devise the scheme and helping obtain inflated appraisals.
Cowboys Mortgage owner Lendell Beacham, 54, of DeSoto, also was arrested. He faces one count of conspiracy to commit bank fraud and wire fraud and one count of wire fraud.
Lockhart and Beacham were expected to make an initial appearance later Thursday. They did not yet have attorneys, White said. A telephone number for Lockhart’s home also could not immediately be found.
The others are expected to surrender to the FBI by Friday, expect for one who is currently serving a federal sentence, federal officials said.
Lockhart played for the Cowboys from 1984 through 1990 and for New England in 1991-92. He recorded 16 career quarterback sacks and made six interceptions, returning one for a touchdown.
FTC Charges Foreclosure Prevention and Loan Modification Marketers with Contempt
The Federal Trade Commission has filed a civil contempt action charging a deceptive mortgage foreclosure rescue and loan modification operation with violating a 2001 court order. Many homeowners paid the defendants up to $5,500 in advance and ultimately lost their homes to foreclosure. The FTC has asked the court to halt the unlawful practices, freeze the defendants’ assets, and seek compensation for victims.
According to papers the FTC filed with the court, the defendants told consumers that they would stop foreclosures. They claimed they were “100% successful and had never lost a customer’s home to foreclosure” and advised consumers to pay them instead of making mortgage payments. They also claimed that they would negotiate modified mortgages with lower interest rates, monthly payments, and principal balances. The FTC charged that, in fact, they obtained few, if any, loan modifications for customers.
Attorney General Sues Orlando Loan Modification Company for Foreclosure Fraud
TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has filed a lawsuit against an Orlando loan modification company alleging the company was committing foreclosure rescue fraud. Three Angels Community Action Network and company president Sherrard A. Haugabrooks are named in the lawsuit filed today in Seminole County Circuit Court. The lawsuit specifically alleges violations of Florida’s Foreclosure Rescue Law, §501.1377.
Members of the Attorney General’s Economic Crimes Division, working as part of the Attorney General’s Mortgage Fraud Task Force, began investigating Three Angels Community Action Network in February 2009. The company allegedly charged homeowners an up-front fee generally equal to a monthly mortgage payment prior to providing loan modification services. The lawsuit further states the company’s client contracts did not contain the contractual disclosures required by Florida’s Foreclosure Rescue Law, a 2008 legislative priority of the Attorney General.