State proposes bill to prevent foreclosure scams

Dec 12, 2008

The Texas Office of the Attorney General and a state lawmaker are behind proposed legislation that would crack down on foreclosure rescue scams.

Attorney General Greg Abbott and Sen. Craig Estes, R-Wichita Falls, are floating a bill dubbed the Foreclosure Rescue Fraud Prevention Act that would enhance the Attorney Generals enforcement authority under the Texas Deceptive Trade Practices Act and place restrictions on foreclosure prevention consultants.

Too many scam artists attempt to target homeowners with large fees and the false promise that they could help Texans avoid foreclosure on their homes, Abbott said.

In addition to new disclosure requirements, the proposal would place new limits on equity purchase agreements. The law would require equity purchase agreement buyers to pay at least 82 percent of the propertys fair market value.

Foreclosure rescue scams are often marketed as foreclosure consultants or mortgage consultants, and their businesses as a foreclosure service or foreclosure rescue agency. But, instead of providing the services promised, the scams take homeowners money, ruin their credit record, and wipe out the hard-earned equity victims built up in their homes.

Read More: Houston Business Journal

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