Lawmakers are being asked to consider a bill protecting homeowners from foreclosure rescue scams.
State Representative Jon Richards (D-Milwaukee) says rising foreclosure rates have lead to a growing number of scam artists offering to buy a home, then rent it back to the old owner. The consumer doesn't find out until after the papers are signed that they'll be paying a rate much higher than they were before the deal. Then, if a payment is missed, the rescuer then evicts them and sells the home.
Richards and State Senator Jim Sullivan (D-Wauwatosa) are sponsoring legislation that would help protect consumers by regulating foreclosure rescues. The bill requires lenders to verify a borrower can repay the loan and prevent them from borrowing additional equity on the home. It would also require them to repay a portion of the profits from any home sale to the original owner.
The bill received a Capitol hearing Tuesday. Several attorneys from housing assistance groups testified about clients who have been taken in by the scams and had their homes taken away as a result. The bill is being considered by a Senate committee.
AUDIO: Andrew Beckett reports (MP3 1:03)
