Tap to Call - (877) 250-8242

Foreclosure Rescue Scheme Banned in Massachusetts

By

Massachusetts Attorney General Martha Coakley is a hero to her state's homeowners.

Coakley took emergency action against schemes that take advantage of homeowners in financial distress. On June 1, she filed a regulation with the Secretary of State's Office that banned for-profit foreclosure rescue transactions in the state.

The regulation went into effect immediately and was effective for 90 days. On August 30th, there was a public hearing on the matter and the foreclosure rescue ban became permanent.

Both Chapter 7 and Chapter 13 bankruptcy can stop home foreclosure, repossession and lawsuits. Find a local bankruptcy lawyer to get protection today.

The Attorney General is given the authority to put the emergency ban into effect by The Massachusetts Consumer Protection Act. Under the Act, Coakley may introduce and put into effect regulations which identify unfair or deceptive conduct by a business that violates the act, and she did just that by banning for-profit foreclosure rescue schemes.

The new regulation comes after a statewide spike in foreclosure rates and strictly prohibits predatory, for-profit foreclosure rescue transactions. Many homeowners considering filing a 7 or 13 bankruptcy and facing foreclosure have been taken advantage of by such schemes in the past and lost both their money and homes.

Coakley's new regulation does not put a ban foreclosure rescues by non-profit community or housing organizations or foreclosure rescue transactions between family members. The regulation is meant to stop predators from taking advantage of homeowners in desperate financial situations, but not to stop homeowners from getting help in keeping their homes from sources where it is actually available to them.

"Foreclosure Rescue Transaction" is defined by the new regulation as a transaction designed to avoid foreclosure and where the homeowner transferring the property maintains an option to reacquire the home by maintaining a legal interest in the home.

In the past, unscrupulous organizations would prey on homeowners who are facing bankruptcy and foreclosure and approach them with an offer of help, but at a steep price. Often these schemers would tell the homeowners that if they paid up, the schemer would be able to stop the foreclosure in its tracks.

These schemers were not attorneys or bank lenders. In some of the schemes, homeowners were told to actually sign over their homes to straw purchasers in order to save them. The straw purchaser would obtain a mortgage on the property and allow the homeowners to stay in the home for a limited amount of time.

Speak to a Bankruptcy Lawyer Today

The homeowners were promised the chance to actually own their homes again at a later date. More often than not, the homeowners would then lose the money paid to the schemer and also their homes.

This type of activity is what Coakley's new regulation is intended to halt.

The regulation is the first step in a plan to address the foreclosure rescue crisis in Massachusetts. The Attorney General's Office is also is putting together a group of private attorneys who will work for free to help homeowners facing foreclosure.

Attorney General Coakley also announced regulations to address unfair and deceptive tactics used in the mortgage industry.

Hearings will be held across the state on the proposed regulations this month. The Attorney General's Office anticipates that final implementation of these regulations will be complete by the end of September.


» Back to Bankruptcy Articles


Tap to Call - (877) 250-8242

PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 400, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.

FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.

If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.

By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.