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Attorney General Ellen F. Rosenblum

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ATTORNEY GENERAL JOHN KROGER CRACKS DOWN ON LOAN MODIFICATION SCAMMERS

August 26, 2009

Two California loan modification companies must stop misleading Oregon consumers

Attorney General John Kroger today announced a new enforcement effort to protect Oregon homeowners by targeting loan modification companies that engage in deceptive and misleading business practices.

"I am committed to helping Oregonians stay in their homes during this recession," Attorney General Kroger said. "We will not allow unprincipled companies to prey on vulnerable Oregonians."

The attorney general announced that his Financial Fraud and Consumer Protection Unit has opened more than half a dozen investigations related to loan modification companies and mortgage fraud. Kroger also announced the results of two cases.

Today's settlements are with National Homeowners Assistance Services, Inc., based in Lake Forest, Calif., and American Mitigation Group, based in Newport Beach, Calif. The companies offered loan modification assistance and related services to homeowners facing foreclosure. The companies purposefully used tactics that could confuse homeowners, including implying they were affiliated with government agencies or programs.

American Mitigation Group has paid $1,000 in restitution to an Oregon consumer and must pay an additional $3,000 to the Oregon Department of Justice for further restitution and to cover its costs. The company is no longer doing business in the state. National Homeowners Assistance Services must pay $4,000 to cover legal costs and must change its practices in order to continue to do business in Oregon.

Today's settlements are one part of an overall Oregon Department of Justice strategy to protect Oregon homeowners. The Department of Justice will vigorously pursue crooked loan modification companies. The Department of Justice also is working to prevent foreclosure in the first place.

The primary effort to prevent foreclosure comes from State Senator Suzanne Bonamici's new homeowner protection law, Senate Bill 628. That bill mandates that lenders notify borrowers about loan modification eligibility and requires that if homeowners seek to modify their loans, lenders cannot foreclose on them during the process. The bill uses $500,000 the Oregon Department of Justice received in a settlement with Countrywide Financial Corporation to provide counseling for struggling homeowners.

"Many times when borrowers fall behind on their mortgage payments they don't know who to call, and when they do, they find that there isn't anyone on the other end of the line to help them navigate this complicated system," said Senator Bonamici (D-NW Portland/Washington Co.). "This legislation is clearly a step in the right direction for addressing the housing crisis in Oregon."

"These problems will only get better if we take swift action," added Attorney General Kroger. "By working with a coalition of law enforcement and state government, we can do a better job of protecting Oregonians from new rip-offs."

Attorney General John Kroger leads the Oregon Department of Justice. The Department's mission is to fight crime and fraud, protect the environment, improve child welfare, and defend the rights of all Oregonians.

Contact:

Tony Green, (503) 378-6002 tony.green@doj.state.or.us |
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