Indiana Attorney General Zoeller Fights Repo Homes Fraud

Distressed homeowners in Indiana can thank their state attorney for working to eliminate repo homes scammers from their state and thereby reduce the number of vulnerable borrowers losing badly-needed money to swindlers.

Indiana Attorney General Greg Zoeller has filed lawsuits against five out-of-state firms which collected fees from troubled homeowners promising to have their loans modified and save their homes from becoming repo homes.

The five out-of-state firms are Home Ownership Preservation Group, Foreclosure Assistance, You Walk Away, Foreclosure Relief Agency and American Mitigation Group.

Zoeller said the lawsuits can stand on their own because all the five companies did not post $25,000 as a surety bond, which is a requirement for companies operating in the state and which was enacted to protect consumers.

Aside from the failure to post a bond, the companies had no consistent records of negotiating with lenders on behalf of the borrowers who paid them money.

Zoeller also expressed his concerns about the predatory nature of the companies’ operations. He said the fraudulent foreclosure companies obtain names of distressed homeowners by researching public records of foreclosure notices and listings of repo homes. They then present themselves to the troubled homeowners who naturally assume that these companies will really work on their behalf to save their houses from becoming repo homes.

Homeowner Vivienne Daniel is one of many borrowers victimized by scammers fronting as legitimate foreclosure prevention consultants. She said she paid $400 to a counselor who promised to talk with her lender. Daniel is more fortunate than the others because before her house could be foreclosed, she immediately recognized she was being taken advantage of and did her own negotiation with her lender.

Although the level of Indiana foreclosures is not as high as the top ten states battered by repo homes, Indiana had 61,141 total foreclosure filings in 2008, according to RealtyTrac’s foreclosure tracking report. A total of 45,937 properties in the state received foreclosure filings, an increase of 64.18 percent compared to 2007 foreclosure filing levels. Its foreclosure rate for 2008 was 1.67.

Attorney General Zoeller has been advising homeowners troubled by thoughts of repo homes to call 1-877-GET-HOPE, the hotline launched by the national government to direct callers to foreclosure prevention counselors who help homeowners for free. He said there are housing nonprofits in Indiana, like Momentive, which offer foreclosure counseling for free.

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• Gov Programs Push Up Numbers of California Repo Homes