Kohl-Collins Amendment Calls For Foreclosure-Rescue Disclosure

Seacoastonline.com - Sen. Susan Collins, R-Maine, is joining Sen. Herb Kohl, D-Wis., in moving bipartisan legislation to protect financially distressed homeowners — often seniors — from unscrupulous financial predators.

In the past five years, mortgage schemes have risen 800 percent, with an estimated 60,000 cases expected this year. In April, the senators introduced legislation aimed at stopping foreclosure scams and are now offering it as an amendment to the comprehensive Foreclosure Prevention Act.

"It is tragic that many senior citizens have been led into loans that are triggering foreclosures, and it is shameful that criminals should add to their distress with fraudulent offers of aid," Collins said.

Foreclosure rescue scams take advantage of homeowners in the process of foreclosing and who are especially vulnerable to deceptive practices that seem to offer hope. Instead, these scams often leave the victims facing a far worse financial predicament, sometimes ruining their credit rating entirely and stripping away their equity, making it almost impossible to recover financially.

The Kohl-Collins amendment, modeled after the original The Foreclosure Rescue Fraud Act they introduced, aims to prevent homeowners from falling prey to these cruel abuses by increasing disclosure and creating strict requirements for a person or entity offering foreclosure rescue services. Specifically, once enacted, the amendment would:

* Prohibit "a foreclosure consultant" from collecting any fee or compensation before completing contracted services and from obtaining power of attorney from a homeowner.
* Require full disclosure of third-party consideration in the property.
* Allow homeowners three days to cancel the foreclosure rescue contract.
* Create a federal floor of protection.
* Allow states without rescue-fraud laws to use these provisions as a way to help scam victims...Read more >>