Mortgage and Foreclosure Complaints Quadruple at AG's Office
Now Ranks First in Number of Requests for Assistance to AG’s Office and Mediation Programs
BOSTON – Mortgage and foreclosure related complaints have quadrupled over the past two years to become the number one reason consumers contacted the Attorney General’s Office for assistance in 2011, Attorney General Martha Coakley announced today during a speech before the Greater Boston Chamber of Commerce.
The Public Inquiry and Assistance Center (PIAC), Local Consumer Programs (LCP) and regional offices across the Commonwealth combined to handle 983 complaints reporting issues with mortgages, foreclosures and loan modifications in 2011, representing a 431% increase since 2009. For the first time ever mortgage complaints ranked first in 2011, outnumbering those related to auto sales, leasing and defective auto parts by 164 (see graph below).
“This data confirms what we have known for some time – the subprime lending and foreclosure crisis is a major concern for homeowners who are often faced with losing their most valued possession,” said AG Coakley. “It is further evidence that resolving this foreclosure crisis is the single most important thing we can do to restore a healthy economy. Our office has filed legislation to comprehensively address this issue and brought a landmark suit against the banks seeking real accountability for their unlawful conduct and relief for homeowners.”
In December, the AG’s Office filed the first comprehensive lawsuit to address the foreclosure crisis by seeking to hold banks accountable for illegal and deceptive conduct. Filed against Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC, the lawsuit sues the banks for their role in allegedly pursuing illegal foreclosures on properties in Massachusetts as well as deceptive loan servicing.
An Act to Prevent Unnecessary and Unreasonable Foreclosures was filed by AG Coakley last year with Senator Karen Spilka and Representative Steven M. Walsh. If passed, the bill will prevent foreclosures by setting standards and mandating loan modifications in certain circumstances. Specifically, the legislation requires creditors to take commercially reasonable efforts to avoid foreclosure on certain mortgage loans secured on homes occupied by owners as their principal residences. Currently, the legislation is being considered by the Joint Committee on Financial Services.
AG Coakley’s office has been a national leader in holding banks and investment giants accountable for their roles in the economic crisis. AG Coakley has obtained recoveries from Morgan Stanley, Goldman Sachs, Royal Bank of Scotland, Countrywide, Fremont Investment & Loan, Option One, and others on behalf of Massachusetts homeowners. As a result of these actions, her office has recovered more than $600 million in relief for investors and borrowers, helped keep more than 25,400 people in their homes, and returned nearly $60 million in taxpayer funds back to the Commonwealth.
The Attorney General's PIAC hotline answers thousands of calls each year from consumers with a range of questions and concerns in the area of consumer protection including automobiles, home improvement, debt collection and retail sales. The hotline is staffed with trained information specialists who can:
- Offer referrals to appropriate organizations or government agencies for help;
- Provide information on the Attorney General's consumer complaint and mediation processes, and community-based consumer and mediation programs.
Consumers with complaints can reach the PIAC hotline at (617) 727-8400.
The Attorney General’s Office provides grants to a statewide network of Local Consumer Programs. These nonprofit programs handle many consumer complaints in their own regions of the state where their local knowledge and community involvement enable them to provide effective assistance to consumers, allowing the Attorney General's Office to focus on statewide patterns of deceptive and unfair trade practices and on more complex complaints.