MADIGAN: MORTGAGE COMPLAINTS INCREASE 65 PERCENT
Attorney General’s Top 10 List Dominated By Mortgages, Consumer Debt
Chicago—The intensifying home foreclosure crisis dominated Attorney General Lisa Madigan’s Top 10 Consumer Complaints for 2009. Madigan today reported that 31,264 consumers filed complaints with her Consumer Protection Division last year. The consumer debt category topped the complaints filed by Illinois consumers, including a 65 percent increase in residential mortgage-related complaints. In addition, an estimated 21,000 consumers have called the Attorney General’s Homeowner Helpline for assistance since 2008, while the Attorney General’s Consumer Fraud Bureau helped secure an estimated $23 million in mortgage-related savings, including loan modifications for at-risk borrowers, last year.
“These numbers demonstrate how this economic crisis is hitting home for tens of thousands of Illinois families,” Madigan said. “Hardworking people are struggling to make their mortgage payments on time. They’re fighting to cope with mounting debts, and they’re being targeted by con artists looking to make a quick buck. This is a challenging time, and I urge anyone who is struggling to make ends meet to contact my office to make sure that they do not become victims of fraud.”
Consumer Debt Complaints Rank First
Madigan has made helping homeowners stay in their homes a top priority. In October 2008, the Attorney General brokered a ground-breaking $8.7 billion settlement in her predatory lending lawsuit against Countrywide, the nation’s largest mortgage lender, that established the country’s first mandatory loan modification program. As a result of this settlement and President Obama’s subsequent HAMP program, thousands of Countrywide borrowers in Illinois, and hundreds of thousands nationwide, have been able to modify their loans and remain in their homes. During 2009, Madigan also filed suit against Wells Fargo, alleging the lender engaged in consumer fraud and illegally discriminated against African American and Latino homeowners by selling them high-cost subprime mortgage loans while white borrowers with similar incomes received lower cost loans.
The Attorney General’s office also reported an increase in complaints against mortgage rescue companies that prey on homeowners who are desperate to save their homes. In the most common form of the scam, these so-called foreclosure “rescue” businesses charge homeowners a large up-front “consulting” fee to negotiate a loan modification with the lender. But after taking the homeowners’ money, these companies actually do little or nothing to save the home, leaving homeowners in an even more difficult situation. Madigan has filed 31 lawsuits targeting mortgage rescue scams.
Madigan established the Homeowner Helpline (1-866-544-7151) in 2008 to provide direct assistance for borrowers who risk losing their homes to foreclosure. Since its inception, the helpline has received more than 21,000 calls from homeowners seeking assistance. The Attorney General’s office also has helped secured more than $21 million in loan modification savings for borrowers who were at risk of losing their homes to foreclosure over the past year. Madigan encouraged consumers who are at risk of falling behind on their mortgage payments to call her office to learn more about homeowners’ rights and the options available to them to try to save their home.
Credit Card Companies
Identity Theft Complaints Rank Second
Consumers brought most of these complaints to Madigan’s office by contacting her Identity Theft Hotline (1-866-999-5630). Trained advocates and attorneys staff the hotline, working with consumers one-on-one to help them take the steps necessary to report the crime to local law enforcement and financial institutions, repair their credit and prevent future problems.
The Top 10 consumer complaints for 2009 are as follows:
For information on all consumer issues, consumers can visit Madigan’s Web site at www.illinoisattorneygeneral.gov/consumers/ or call one of the Consumer Fraud Hotlines or the Identity Theft Hotline at the numbers listed below.
Chicago Consumer Fraud Hotline: 1-800-386-5438