Category Archives: consumer issues

AG Says Don’t Let “Phishing” Scams Hook You

With the recent possible theft of millions of email addresses from a Dallas-based advertising company, several large companies behind brands such as Chase, Best Buy and Verizon worry that hackers may target their customers to obtain account log-in information.
 
For that reason, Attorney General Dustin McDaniel issued this consumer alert today to warn Arkansans to watch for attempts by con artists to retrieve their personal information via fraudulent email messages. This scheme is referred to as “phishing.”
 
“While phishing schemes are not new, con artists continue to come up with new ways to trick consumers into handing over sensitive information. An information breach such as what occurred with the firm in Dallas can give these con artists a huge pool of targets to attempt to con,” McDaniel said. “The email address by itself is not the sort of personalized information which will lead to identity theft, but it does give the identity thief an advantage in his scheme to ’phish’ for what he needs to steal your identity.”
 
Many phishing schemes contact random people via email designed to look like it comes from an entity, such as a bank, with which the consumer regularly does business. If the “phisher” can  convince the consumer to log in to what looks like a valid website account with his user name and password, the fraudulent site captures the information, enabling the person behind the scheme to access the real accounts.

If con artists have the actual email addresses of bank or retail customers, which is the threat posed by the recent information breach, they will be able to be much more convincing in their efforts because they will know that their target does have an account with a specific business.
 
“If you suspect there is a problem with your email account or if you get one of these emails, do not panic and do not reply with your personal information,” McDaniel advised.
 
Instead, to avoid falling for a phishing scam, use these tips:
    • Do not give sensitive information in response to an unsolicited request for it.
    • Independently contact the bank or retailer identified in the email to confirm that the email does not come from that entity.
    • Delete the “phishing” email.
    • If you have questions or concerns about an email you suspect is a “phish” or any other email message, contact the Public Protection Department of the Attorney General’s Office with questions or concerns at 501-682-2341 or 800-482-8982, or by filing a complaint online at www.ArkansasAG.gov .

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House to House: Six Ways To Identify A Loan Modification Scam

In last week’s column I discussed a fairly new and dangerous threat has arisen for homeowners who have fallen behind on their mortgage payments and may be at risk of foreclosure – opportunistic companies. They often refer to themselves as a “foreclosure consultant”, “mortgage consultant,” and market themselves as a “foreclosure service”, “foreclosure rescue agency” or “loan modification company”. They count on homeowners being vulnerable and desperate.

These companies claim they can assist homeowners facing foreclosure with options that allow them to keep their property, refinance or modify an existing mortgage, repair credit or help “buy more time.” In reality, these “options” are intended to convince you to take the wrong steps so they can take your money and possibly your home. Remember the old saying, “If it’s too good to be true, it probably is.”

The Federal Trade Commission (FTC) has issued a new rule that bans the acceptance of an advance fee by mortgage relief/loan modification services until the homeowner has a written offer from their lender or servicer that they decide is acceptable. The Mortgage Assistance Relief Services (MARS) Rule is designed to protect homeowner from mortgage relief scams that have persisted during the current mortgage crisis.

According to the MARS Rule, mortgage relief companies must disclose that they are not associated with the government and that their services have not been approved by the government or a consumer’s lender; that the lender may not agree to change loan terms; and that consumers could lose their homes or damage their credit ratings if told to stop paying their mortgage. The MARS Rule also prohibits several common advertising tactics used by mortgage relief services and requires companies to have reliable evidence to support any claims about the benefits or effectiveness of the services they provide.

 “The good news for homeowners facing foreclosure is that legitimate avenues for relief exist,” McDaniel said.  “If a homeowner is having difficulty keeping up with mortgage payments, that homeowner should contact his or her lender to negotiate a modified payment plan. All lenders and servicers have a legal obligation to offer remediation services.”

 The National Association of REALTORS® and its partner NeighborWorks America, a national, nonprofit organization created by Congress to provide financial support, technical assistance and training for community-based revitalization efforts, have identified the following six red flags to indicate that you may be dealing with a loan modification scammer:

A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage. They may pocket your money and do little or nothing to help you save your home from foreclosure.

A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.

A company/person advises you to stop paying your mortgage company and pay them instead. Despite what a scammer will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.

A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand. A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.

A company claims to offer “government-approved” or “official government” loan modifications. They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. And, remember, you do not have to pay to benefit from government-backed loan modification programs.

A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.

If you or someone you know has been the victim of a loan modification scam, the Arkansas REALTORS® Association urges you to please take action by doing any or all of the following:

Call the Homeowner’s Hope Hotline at 1-888-995-HOPE (4673).
Call the Federal Trade Commission (FTC) at 877-FTC-HELP (1-877-382-4357)

Contact Arkansas Attorney General Dustin McDaniel’s Consumer Hotline at (501) 682-2341 or (800) 482-8982. Consumers may also visit McDaniel’s website, http://www.arkansasag.gov.

♦♦♦

House to House is distributed weekly by the Arkansas Realtors® Association.

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House to House: Loan Modification Scams Proliferating

With the national foreclosure rate persistently high, many homeowners have turned to loan modification or foreclosure “rescue” companies for help – only to realize they’ve been scammed. Anyone can become a victim of a loan modification scam. Every day, scam artists prey on unsuspecting homeowners who are facing foreclosure. These homeowners are losing thousands of dollars and their homes—lured by the promise of loan modification help.

“The best way to prevent yourself from falling victim to a scam is to be educated about the scammers’ tactics and be ready to say ‘No’ to any deal you’re unsure about,” says Arkansas Attorney General Dustin McDaniel. “We encourage consumers to ask questions, go online to check the legitimacy of the party you’re dealing with, or contact our Consumer Protection Division if they are concerned.”

Common Loan Modification Scams

According to the National Association of REALTORS® and its partner NeighborWorks America, a national, nonprofit organization created by Congress to provide financial support, technical assistance and training for community-based revitalization efforts, the following are some of the most common loan modification scams out there today.

Phony Counseling or Foreclosure Rescue Scams
The scam artist poses as a counselor and tells you he can negotiate a deal with your lender to modify your loan or save your house—if you pay him a fee first. The fee may be called a processing fee or administrative fee. He may even tell you not to contact your lender, lawyer or housing counselor—that he’ll handle all details. He may even insist that you make all mortgage payments directly to him while he negotiates with the lender. Once you pay the fee, or a few mortgage payments, the scammer disappears with your money.

Fake “Government” Modification Programs
Some scammers may claim to be affiliated with, or approved by, the government, or they may ask you to pay high, up-front fees to “qualify” for government mortgage modification programs. The scammer’s company name and Website may sound like a real government agency, but the Website may end with .com or .net instead of .gov. You may also see terms like “federal,” “HAMP,” “MHA,” “HARP” or other words related to official U.S. government programs.

Contact your lender first. Your lender will be able to tell you if you qualify for any government programs to prevent foreclosure or modify your loans. And you do not have to pay to benefit from these programs.

Forensic Loan Audit
The scammer who may be called a forensic or mortgage loan “auditor” offers to review your mortgage loan documents to determine whether your lender complied with state and federal mortgage lending laws. The scammer will usually require that you pay a fee to start the process. The scammer may say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal, or even cancel your loan.

There is no proof that a forensic loan audit can save your home from foreclosure although it’s conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer. Even if you sue your lender and win, your lender is not required to modify your loan to make it more affordable. If you cancel your loan, you will have to return the borrowed money, which may result in you losing your home.

Bait-and-Switch
The scam artist convinces you to sign documents for a “new loan modification” that will make your existing mortgage current. This is a trick. You actually just signed documents that surrender the title or deed of your house to the scam artist in exchange for a “rescue” loan. Thoroughly read any document before you sign it.

Rent-to-Own or Leaseback Scheme
A scammer urges you to surrender the title or deed of your home as part of a deal that will let you stay in your home as a renter and then buy it back in a few years. He may tell you that surrendering the title will permit a borrower with a better credit rating to get new financing—and keep you from losing your home. However, the scammer may have no intention of ever selling the home back to you.

But the terms of these deals usually make buying back your home impossible. Worse yet, when the new borrower defaults on the loan, you’re evicted.

Short Sale Scam
Scammers, sometimes called “short sale negotiators” or “short sale processors,” may promise to expedite a short sale and usually require you to pay a fee, which is illegal in many states. Some scammers may even include surcharges or hidden fees before the transaction closes, which are also illegal in many states. The scammer may also misrepresent the value of the home to the lender.

A short sale may be a legitimate option for a homeowner in default or homeowner who is current yet the value of the home has fallen — if the lender agrees to the short sale. Homeowners should work with a REALTOR®  since the law requires that the person be properly licensed to negotiate the short sale with your lender.  Arkansas homeowners can verify licenses with the Arkansas Real Estate Commission by visiting their website at http://www.arec.arkansas.gov.

Bankruptcy to Avoid Foreclosure
The scammer may promise to negotiate with your lender or get refinancing on your behalf if you pay a fee up front. Instead of contacting your lender or refinancing your loan, he pockets the fee and files a bankruptcy case in your name—sometimes without your knowledge.

A bankruptcy filing often stops a home foreclosure, but only temporarily. Filing bankruptcy stops any collection and foreclosure while the bankruptcy court administers the case. But, eventually you must start paying your mortgage, or the lender will be able to foreclose.

You could lose the money you paid to the scammer and your home. Worse yet, a bankruptcy stays on your credit report for 10 years, which makes it difficult to obtain credit, buy a home, get life insurance or even get a job.

Next week, I’ll focus on 6 signs you can look for to indicate you may be dealing with a loan modification scammer.

***

House to House is distributed weekly by the Arkansas Realtors® Association.

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Arkansas Housing Market Holding Firm for Year

The Arkansas REALTORS® Association reported today that Arkansas home sales saw a slight slowdown in February after seeing a 13 percent increase in the number of Arkansas homes sold in January 2011 as compared with the same period last year.  According to today’s report, Arkansas home sales saw an almost 6% decrease sold in February as compared with the same month last year while the average price of homes sold in the 42 county area covered by the report experienced an increase of more than 1.5 percent to $136,300.

The following is a link to the full report in Excel format http://dl.dropbox.com/u/12295076/February2011%20Housing_FINAL.xls

The National Association of Realtors® reported on March 21 that existing home sales in the South fell 10.2 percent and that the median home price in the South was $134,600.  The following is a link to the full news release from NAR: http://www.realtor.org/press_room/news_releases/2011/03/feb_decline

“As is typical for the first quarter of any year, Arkansas home sales are sluggish,” said Amy Glover Bryant, Director of Communications for the Association.  “However, for the year to date the report reflects increases, though small, in the areas of units sold, home values and average home prices.  We see this as an encouraging sign when you take in to consideration that during the same period last year the federal government was rolling out the first-time home buyer tax credit.  In short, we are holding our own.”

A number of Arkansas counties experienced strong gains in the number of homes sold in February 2011 including Faulkner, Arkansas and Boone which saw 42 percent, 80 percent and 31 percent increases in the number of homes sold, respectively.

Representatives of the Arkansas Realtors® Association will be available throughout today to discuss the Arkansas numbers.  To set up an interview,
please contact Amy Glover Bryant, Director of Communications at 501.225.2020 or at 501.786.9415.  

As always, please keep in mind that this is an approximation of the Arkansas housing market based on the information provided to the Association at the
time of the report’s distribution.  Data is provided by REALTORS® reporting through participating multiple listing services in Arkansas and while deemed
reliable is not guaranteed.

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House To House: Americans more confident about the stability of home prices

The Arkansas REALTORS® Association released its monthly housing report last week showing that while home prices in Arkansas are still sluggish, January was a solid month for home sales.  In January Arkansas home sales saw a 13 percent increase in the number of Arkansas homes sold as compared with the same period last year – a time when the market was seeing a boost from the First-Time Homebuyer’s Tax Credit.  The report also showed that the average price of an Arkansas home increased by more than 2.5 percent in January to $143,030.

Arkansas REALTORS® Association President Andy Meyers said that thenumbers are reflective of growing consumer confidence.  “Sales occurring in January are reflective of purchase decisions being made during the holiday season and, when considered without the incentive of the home buyer tax credits, indicates that Arkansas consumers are becoming confident again.”

According to a recent national housing survey by Fannie Mae, Meyers is absolutely right.  The Fannie Mae Fourth Quarter National Housing Survey, conducted between October 2010 and December 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

According to the survey, Americans are more confident about the stability of home prices than they were at the beginning of 2010, even though they lack confidence in the strength of the economy:

  • Seventy-eight percent of respondents believe housing prices will hold steady or increase over the next twelve months, up from 73 percent in January 2010;
  • But almost two-thirds still believe the economy is on the wrong track, virtually unchanged (61%) from the beginning of last year.

“Over the course of the last year, we gained deeper insights into Americans’ confidence in the strength of the housing market and the economic recovery,” said Doug Duncan, Vice President and Chief Economist of Fannie Mae. “More Americans believe that housing prices will remain stable over the next year. We also are seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y. But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future.”

Other Survey Highlights

Younger Americans, Hispanics, and African-Americans are generally more positive about owning a home than the general population. Fifty-nine percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment, even though this age group suffered the steepest decline in homeownership during the housing crisis — from nearly forty-four percent when home prices peaked to under forty percent in 2009.

More than one-third of Hispanics (34%) and African Americans (35%) say they will buy a home in the next three years, compared to only one in four (23%) of all other Americans.

The percentage of Americans who believe that buying a home is a safe investment declined to 64 percent over the course of the year, from 70 percent in January 2010. This is down sharply from a similar survey conducted in December 2003, when 83 percent of the general population thought buying a home was a safe investment.

During 2010, survey respondents increasingly expressed a strong belief that it will be harder for future generations to obtain a mortgage. Three-quarters of those surveyed (74%) believe it will be harder to get a mortgage in the future, up from just over two-thirds at the beginning of 2010.

One out of three delinquent borrowers continues to say they have considered defaulting on their mortgage. However, that number fell from 39 percent at the beginning of the year to 31 percent in the fourth quarter. The number of delinquent borrowers who say they have seriously considered defaulting also has declined, from 25 percent in January 2010 to 19 percent.

For more detailed findings from the survey, visit http://www.fanniemae.com/media/survey/index.jhtml.  To subscribe to the Arkansas REALTORS® Association’s Monthly Housing Reports readers can email me at Questions@ArkansasRealtors.com.

 House to House is written by Amy Glover Bryant, APR and distributed weekly by the Arkansas REALTORS® Association.

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House to House: No Matter What the Emergency, Preparedness Is Key

The old joke, “If you don’t like the weather in Arkansas, just wait a day” seems more like the truth the older I get.  I believe it was just two weeks ago that my family and I were celebrating “Sledfest” at our house.  Last night as I watched the Oscars I was being warned of potential tornadoes in my area and this morning when I woke up all of America seemed to be talking about earthquakes in Arkansas.  At t his rate, I expect a blizzard to envelope us next week..

No matter what the severe weather outlook, it is important for Arkansans to have a plan in place in case of an emergency.  According to the Federal Emergency Management Agency (FEMA) this means means having your own food, water, and other supplies in sufficient quantity to last for at least three days.

 The following is a recommended list of items to include in a basic emergency supply kit:

 – Water, one gallon of water per person per day for at least three days, for drinking and sanitation

– Food, at least a three-day supply of non-perishable food

– Battery-powered or hand crank radio and a NOAA Weather Radio with tone alert and extra batteries for both

– Flashlight and extra batteries

– First aid kit

– Whistle to signal for help

– Dust mask, to help filter contaminated air and plastic sheeting and duct tape to shelter-in-place

– Moist towelettes, garbage bags and plastic ties for personal sanitation

– Wrench or pliers to turn off utilities

– Can opener for food (if kit contains canned food)

– Local maps

– Cell phone with chargers

 Additional items to consider adding to an emergency supply kit include:

 – Prescription medications and glasses

– Infant formula and diapers

– Pet food and extra water for your pet

– Important family documents such as copies of insurance policies, identification and bank account records in a waterproof, portable container

– Cash or traveler’s checks and change

– Emergency reference material such as a first aid book or information from http://www.ready.gov

– Sleeping bag or warm blanket for each person. Consider additional bedding if you live in a cold-weather climate.

– Complete change of clothing including a long sleeved shirt, long pants and sturdy shoes. Consider additional clothing if you live in a cold-weather climate.

– Household chlorine bleach and medicine dropper – When diluted nine parts water to one part bleach, bleach can be used as a disinfectant. Or in an emergency, you can use it to treat water by using 16 drops of regular household liquid bleach per gallon of water. Do not use scented, color safe or bleaches with added cleaners.

– Fire Extinguisher

– Matches in a waterproof container

– Feminine supplies and personal hygiene items

– Mess kits, paper cups, plates and plastic utensils, paper towels

– Paper and pencil

– Books, games, puzzles or other activities for children

Through its Ready Campaign, the U.S. Department of Homeland Security educates and empowers Americans to take some simple steps to prepare for and respond to potential emergencies, including natural disasters. For more information on how your family can develop a family emergency plan, visit www.Ready.gov

 House to House written by Amy Glover Bryant, Director of Communications, and is distributed weekly by the Arkansas Realtors® Association.

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AG Dustin McDaniel Identifies Top Consumer Complaints

In conjunction with National Consumer Protection Week, Attorney General Dustin McDaniel announced today the 10 most common complaints fielded by his office’s Consumer Protection Division last year.

McDaniel’s Consumer Protection Division handled more than 10,000 total complaints from concerned Arkansas consumers in 2010. Atop the list were grievances about automobile transactions, followed by complaints regarding debt collection agencies.

“Our office deals every day with a wide variety of calls and complaints about disputes involving business practices, or sometimes, just out-and-out scams,” McDaniel said. “It’s important to me that consumers know we are here to help them navigate through any potential pitfalls in their consumer transactions. We will also investigate any improper activity.”

The Top 10 most common consumer complaints last year, by category, were:

Automobiles

Debt collection services

Check-cashing and payday-lending services

Cable TV and satellite services

Home and business telephone services

Home improvement, repair and construction

Cellular phone services

Mortgages Credit and credit repair services

Internet services and Internet auction sites

McDaniel said the majority of automobile dealers are reputable, but automobile-transaction complaints are perennially the most common reported to the Consumer Protection Division. Such complaints often involve “yo-yo” sales practices, where a consumer drives home a car to find out at a later date the actual details of the sale – usually the tactic involves a higher financing cost for the car than the cost originally quoted.

Other automobile complaints involve pressure to buy high-priced add-on services like gap insurance, credit-life and extended warranties; and misrepresentations about the condition of the automobile, such as its salvage history.

Debt collectors often raise the ire of consumers through harassing tactics, attempts to collect old, time-barred debt, or by seeking add-on fees. Sometimes, the debt collectors misidentify the party from whom they are seeking money.

“These types of complaints are the same issues we’ve seen for years and will continue to see across the country,” McDaniel said. “The best way to avoid these common problems is for consumers to be well-informed and know their rights.”

To that end, Arkansans may call the Attorney General’s Consumer Protection Hotline at (501) 682-2341 or (800) 482-8982; or visit the Attorney General’s website, www.arkansasag.gov.

National Consumer Protection Week is observed each year in an effort to promote awareness of consumer rights and help consumers make better-informed decisions. For more information about the observance, visit http://www.ncpw.gov. Tuesday, McDaniel will announce the Top 5 scams investigated by his office in 2010.

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