Connecticut AG Urges Passage Of New Law To Target Loan Modification, Debt Reduction Firms

From the Connecticut Attorney General's Office:

• Attorney General Richard Blumenthal [Tuesday] proposed legislation to fight predatory debt reducers that offer mortgage and debt rescue services that may actually cost consumers their homes. [...] Debt reducers are unregulated and often claim to offer services to rescue homeowners from foreclosure or severe debt.

• In some cases, debt reducers deceive consumers into relinquishing their homes, turning homeowners into tenants. In other cases, consumers pay expensive advance fees to debt reducers that fail to provide promised relief. Often, consumers report that oral promises fail to translate into consumer contracts.

• Blumenthal's proposal -- An Act Concerning Foreclosure Rescue and Debt Reducers -- would compel debt reducers to provide advance disclosures that clearly and conspicuously explain their services, and prohibit advance fees.

For more of the Connecticut AG press release, see Attorney General Investigates And Seeks To Stop Predatory Debt Reducers.

See also, The Connecticut Post: Blumenthal: Beware of debt-reduction companies.