Press Release
August 18, 2010

Mayor Daley Warns Residents Against Loan Modification Fraud, Raises Consumer Awareness

Encourages Homeowners to Work with the City and HUD-certified Counseling Partners to Obtain Free Foreclosure Prevention Services
Mayor Daley at news conference held at Neighborhood Housing Service Office
Mayor's Press Office    312.744.3334

View The YouTube Video

Mayor Richard M. Daley today joined City officials and community partners to remind residents of the dangers of loan modification scams during a press conference held at the Neighborhood Housing Services Office, 1279 N. Milwaukee.

 
“Especially in these difficult times, we must come up with new ways to help more people in more neighborhoods of Chicago remain homeowners,” said Mayor Daley. “Over the past several years, through many of the free services offered by the City, residents have come to consider the City a trusted source of information in fighting foreclosure and modifying their loans.” 
 
 “Loan Modification Scams” are the latest risk facing homeowners who are feeling desperate. Loan Modification Scam artists claim to be able to help families save their homes or modify their loans – for a fee.
 
Today, the City filed a consumer protection lawsuit against a loan modification company called E.A.C. Financial (EAC) and the two people behind it.
 
The lawsuit alleges that EAC conducted an unlawful loan modification scheme and is seeking fines and restitution for homeowners. The company took up-front fees for loan modification services from homeowners – which is prohibited by Illinois law. And after having the money in hand, EAC did not actually obtain modifications for the homeowners.  
 

Daley said residents should avoid anyone who:

  • Asks for a fee in advance of providing services
  • Guarantees they will stop a foreclosure or modify your loan
  • Tells you to stop paying your mortgage and pay them instead
 

“Getting help to stay out of foreclosure and keeping your home doesn’t mean paying a fee. Advice and assistance are available from trusted non-profit organizations working in partnership with the City of Chicago, at no cost to the homeowner,” the Mayor said.

In addition, the City is hosting an event this weekend that is free to the public to help people who are having trouble paying their mortgage   

The “Fix Your Mortgage” event — one of four being held this year — is scheduled for this Saturday, August 21 at Northside College Prep High School, 5501 N. Kedzie. 

The City has worked with a number of partners to sponsor six Fix Yor Mortgage events, assisting more than 2,600 homeowners since 2009 as part of its comprehensive outreach efforts to help homeowners navigate the federal Home Affordable Modification Program (HAMP). 

These events are just one of the many initiatives that the City has launched to address foreclosures in its neighborhoods.

Since 2003, the City of Chicago, Neighborhood Housing Services of Chicago, 22 lending institutions and the Federal Reserve Bank of Chicago have prevented more than 3,000 foreclosures, reclaimed nearly 790 vacant troubled buildings and counseled more than 16.900 Chicagoans through the Homeownership Preservation Initiative (HOPI).

Last year alone, the HOPI 311 Campaign connected 4,700 residents with free credit counselors.

“We must work together to keep families in their homes and create solutions that will protect our neighborhoods,” said Daley. “I encourage residents to call 311 for a referral to a trusted agency that can offer assistance or visit www.LoanScamAlert.org to learn more about how to avoid loan modification scams,” Daley added.
 
 
###