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Foreclosure and Credit Assistance
The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern. Consumer alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.
FORECLOSURE AND CREDIT ASSISTANCE
As a result of the recent home mortgage foreclosure crisis, there has been a dramatic rise in the number of unscrupulous businesses that promise to help consumers keep their homes. The Federal Trade Commission has warned of scam artists who prey on the vulnerability of desperate homeowners in order to collect handsome fees -- but don't deliver any of the promised services. Many of these shady operations engage in high-pressure sales tactics and demand substantial fees in advance. (Links to consumer alerts and advisories are set forth below.)
If you are behind on your mortgage payments and facing foreclosure, WATCH OUT for fraudulent foreclosure consultants who target distressed homeowners. The following tips can help you avoid being scammed.
RED FLAGS -- Avoid Working with any person or company that:
WHAT YOU CAN DO TO AVOID BEING A VICTIM:
MICHIGAN CREDIT PROTECTION ACT
The Michigan Credit Services Protection Act protects consumers by requiring most businesses that offer to prevent foreclosures or modify mortgage loans to complete the services before collecting a service charge from the consumer. In other words, a credit services organization may not charge a fee in advance.
IT IS ILLEGAL TO DEMAND PAYMENT BEFORE COMPLETING SERVICES
Under Michigan's Credit Services Protection Act, it is illegal for most companies and individuals to charge or receive a fee before completing any of the following services:
WHAT QUALIFIES AS A CREDIT SERVICES ORGANIZATION?
Any individual or business entity that provides or offers foreclosure prevention services (or any of the other credit-related services listed above) any is a "credit services organization" covered by the Act, unless one of the following exceptions applies:
WHAT OTHER PROTECTIONS DOES THE CREDIT SERVICES PROTECTION ACT OFFER?
The Act requires credit services organizations to:
The Act also allows consumers to bring private lawsuits and, if successful, to recover:
The full text of the Michigan Credit Services Protection Act is available from the Michigan Legislature's website at:
additional INFORMATION ON FORECLOSURE RESCUE SCAMS, CREDIT COUNSELING, AND FORECLOSURE PREVENTION
Michigan Attorney General's Office:
"Avoid Foreclosure - Tools to Help Save Your Home"
(information and schedule of upcoming public forums)
"Do You Qualify for the President's Plan?"
"Michigan Lending and Foreclosure Guide"
"Avoiding Foreclosure: A Guide for Michigan Homeowners"
"Beware of Foreclosure Rescue Scams-Common Warning Signs"
"Get Help If You Are Behind on Your Mortgage Payments"
"Understanding the Foreclosure Process"
"Home Lending and Foreclosure Rescue Scams"
"Avoiding Credit Repair Scams"
Federal Trade Commission:
"Foreclosure Rescue Scams: Another Potential Stress for Homeowners in Distress" http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre42.shtm
"Fiscal Fitness: Choosing a Credit Counselor"
U.S. Financial Literacy and Education Commission:
General Information on Financial Matters
US Dept of Justice:
Credit Counseling Agencies Approved by US Bankruptcy Courts in Michigan:
Internal Revenue Service:
The IRS has revoked tax exemptions for many non-profit credit counseling organizations. Check the IRS database of tax-exempt, charitable organizations to determine if a non-profit agency has retained its tax-exempt status:
HOW TO FILE A COMPLAINT WITH THE ATTORNEY GENERAL
Consumers may report violations of the Credit Services Protection Act to the Attorney General's Consumer Protection Division at:
Consumer Protection Division
Toll free: 877-765-8388
www.michigan.gov/ag (online complaint form)
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