Prevent Loan Scams
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Minnesota

 



Help for Distressed Homeowners in Minnesota

 

The following is a list of legal service providers in Minnesota that assist homeowners with foreclosure/loan modification needs and/or mortgage scams.

Legal Aid - Mid Minnesota Legal Assistance

Assistance:     Foreclosure
Location: Minneapolis, MN
Website: http://www.mylegalaid.org/poverty-law/legal-aid-society-of-minneapolis
Phone: 612-334-5970 (Intake for New Clients-Hennepin County)

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Report A Scam


Attention homeowners:  If you think you have been a victim of a scam, or approached by a scammer, report it to the Loan Modification Scam Prevention Network now!  Your complaint could provide vital information that will help put loan modification scammers out of business.  

Call 1-888-995-HOPE or click here to submit a complaint online. (With your permission, the complaint will automatically be shared with federal, state and local law enforcement)

How Do I Know if I Am a Victim of a Scam?

The easiest way to determine if you are a victim of a loan modification scam or have been approached by a potential scammer is just to ask yourself two simple questions:

  1. Did anyone offer to help modify your mortgage, either directly, through advertising, or by other means, such as a flyer?
  2. Were you guaranteed a loan modification or asked to do to any of the following: pay a fee, sign a contract, redirect mortgage payments, sign over title to your property, or stop making loan payments?

If the answer to either question is "yes," report the potential scam now by calling 1-888-995-HOPE or by filling out the simple online complaint form.

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List of Alleged Scammers

 
In Minnesota, law enforcement officials have brought civil and criminal lawsuits against numerous individuals and companies for alleged loan modification scams.  In addition, Minnesota regulatory agencies may have revoked licenses of individuals perpetuating fraud against homeowners in distress.  Please be aware of the names below as scammers have been known to continue operations even after having been caught.   This information is not exhaustive, however.  Generally, homeowners seeking loan modification assistance are encouraged to work with HUD certified housing counselors, which can be found by going to http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm.  Homeowners may also call the Homeowner's HOPE Hotline 1-888-995-4673 for free loan modification assistance.

The list of alleged scammers on this website was last updated on January 25, 2010. Please check http://www.ag.state.mn.us/Consumer/Housing/Default.asp for updated information regarding the Minnesota Attorney General's mortgage-related fraud actions.  All information on this page is publicly available.

According to the Minnesota Attorney General's website, no suits against individuals have been filed.

According to the Minnesota Attorney General's website, no criminal suits against individuals have been filed.

Businesses facing civil penalties:

American Financial Corp. d/b/a National Foreclosure Counseling Services
American Foreclosure Specialists, LLC
American Housing Authority, Inc./American Housing Financial, Inc.
American Modification Consultants, LLC, d/b/a American Mitigation Consultants
Davis Mitigation, Inc. d/b/a Davis Foreclosure Assistance
D.R. Financial Services Corp. of California d/b/a D.R. Financial and Superior Home Loans
Foreclosure Assistance Solutions, LLC d/b/a FAS d/b/a Mortgage Second Chance
Home Assure, LLC d/b/a Expert Foreclosure
Home Funding Corporation
IMC Financial Services, LLC
INQB8, LLC, d/b/a Discount Mortgage Relief
Law & Associates, LLC
Lewis Loss Mitigation, Inc. of Alabama d/b/a Stop Foreclosure Center d/b/a Lewis and Associates Consulting
Mortgage Default Assistance, LLC
National Foreclosure Relief, Inc. 

The Minnesota State Bar Association and the Minnesota Board of Professional Responsibility have not publically identified any attorneys about whom complaints have been lodged regarding loan modification services, and they do not make public ongoing investigations.  This information is current as of December 17th, 2009.

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Important State Loan Modification Scam Rules and Laws


Minnesota has enacted several state laws that directly address loan modification scams.  Homeowners with a basic understanding of these laws are less likely to become victims as they may be able to identify potential scams and illegal activities.  

KNOW YOUR RIGHTS!


Minnesota Law Prohibits Advance Fees for Loan Modification Services (Minnesota Statute 325N.01-.09)

Enacted in 2004, Minnesota prohibits the upfront payment of fees by homeowners to anyone assisting with loan modifications.  For the most important provisions of the law, click here.

Protection of Homeowners Against Equity Stripping by Foreclosure Purchasers (Minnesota Statute 325N.10-.18)

Since 2004, Minnesota strictly regulates the transfer of real property by a foreclosed homeowner during a foreclosure proceeding, as well as the subsequent conveyance (or promise thereof) back to the homeowner.  The purpose of the law regulating this is to avoid the abusive practice called "equity stripping" by ensuring that "foreclosure purchasers" follow certain standards. For the most important provisions of the law, click here.

Rules Governing Attorneys Providing Loan Modifications

Why are foreclosure consultants and attorneys teaming up to defraud homeowners experiencing mortgage-related distress?  Individuals acting as "foreclosure consultants" are not entitled to receive payment until their loan modification work is completed.  However, attorneys are permitted to accept advance fees for providing typical legal services.  As a consequence, some foreclosure consultants and others offering foreclosure prevention services may partner with attorneys in an effort to get around laws that prohibit them from receiving payments from homeowners before providing the foreclosure prevention services. Homeowners should know that these partnering arrangements may violate the ethics rules governing attorneys' professional conduct in Minnesota.

To date, the Minnesota State Bar has not instituted specific loan modification scam regulations or initiatives.  However, for some examples of attorney misconduct related to foreclosure prevention activities that are prohibited by the Minnesota Bar, click here.

Secondary State Laws

The remedies referenced above are cumulative, and other statutory or common law remedies may also be available. There are additional state laws that may not address loan modification scams directly, but could be used for prosecuting or filing private lawsuits against alleged scammers. For more information on some of these additional state laws, click here.

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State and Local Law Enforcement


The following is a brief description of state and local law enforcement efforts underway in your state in the fight against loan modification scammers.  This information is not exhaustive and may change depending upon the resources and priorities of the state and local government officials and agencies.

State Enforcement Efforts


Minnesota Attorney General's Office

The Minnesota Attorney General's Office has been active in pursuing mortgage rescue scammers.  The Office offers a hotline and a general fraud complaint form online, as well as loan scam information on its website.  The current Minnesota Attorney General has filed several lawsuits seeking injunctive relief, civil penalties, and restitution for homeowners.

Resources:

Minnesota Department of Commerce (MDC)

The Minnesota Department of Commerce has urged consumers to check the license status of any company offering mortgage loan modification services in Minnesota.  More importantly, the MDC has urged homeowners to first consider working directly with their loan servicer or contacting the Minnesota Homeownership Center to take advantage of their free loan modification service, before paying an upfront or advance fee for such services.  The Department of Commerce requires persons who engage in loan modifications to have a residential mortgage originator license pursuant to Minnesota Statutes Chapter 58.  The website provides a look-up for consumers to research licensees.

Resources:

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Additional Informational Resources


General Mortgage Fraud Resources (including Loan Modification Scams)


Better Business Bureau

Homeowners can go to the Better Business Bureau's (BBB) website to research or file a complaint against a business.  Please note that a new business may not appear on the site.  There are branches of the BBB throughout Minnesota.  To find the BBB nearest you, go to: http://www.bbb.org/us/find-a-bbb/.

Resources:      

Minnesota Attorney General's Office

Minneapolis CityLiving Program

Minnesota Housing Finance Agency

Law Help MN

Mortgage News Daily

The Mortgage Fraud Reporter

The Mortgage Fraud Blog

Other National Resources


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The Foreclosure Crisis in Minnesota


Minnesota has been hit by the foreclosure crisis, although not as hard as western and southern states like Nevada, Florida, and California.  According to RealtyTrac, an aggregator of foreclosure-related information, Minnesota had the twentieth-highest rate of foreclosure filings during 2009.  In total, one out of every seventy-three households went into foreclosure during the time period.  The year 2009 experienced a 56.28% change from 2008 foreclosure rates and a 174.27% change from 2007.

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Disclaimer: This website is designed for informational purposes only.  It is not legal advice and is not intended to create an attorney-client relationship.  The Loan Modification Scam Prevention Network does not warrant any information contained in this guide, nor does the Network suggest that the information in this website should be used as a basis to pursue legal advice or decision making. 

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