Idaho consumers filed more complaints about mortgage modifications in 2009 than about any other category.
Idaho Attorney General Lawrence Wasden released a report this week on consumer protection activities for 2009, reporting record collections of restitution for Idaho consumers, as well as record civil penalties and costs collected for the State of Idaho.
As Idaho foreclosures increased by 89 percent compared to the previous year, Idaho consumers filed 353 complaints relating to mortgage modification businesses. As a result, loan modifications, which had never previously been in the top 10, was the number one complaint category in 2009.
“We received reports of outrageous fraud,” Attorney General Lawrence Wasden said in a release. “Some of these operators took advantage of desperate homeowners by charging hundreds, or even thousands of dollars, in upfront fees, while taking no action to modify the mortgage.”
Wasden said the Consumer Protection Division responded aggressively, pursuing several enforcement actions against deceptive loan modification companies, hiring a part-time housing counselor, publishing two free consumer handbooks and producing public service announcements to inform Idahoans that free help is available.
In addition, his staff worked with loan servicers to facilitate loan modifications, and to reverse, postpone or cancel foreclosures; investigated several hundred complaints against 10 mortgage modification and foreclosure rescue consultants; filed consumer protection lawsuits against two mortgage modification and foreclosure rescue consultants; entered into settlement agreements with three mortgage modification and foreclosure rescue consultants; and, recovered $60,935 in restitution for consumers related to mortgage modification and foreclosure rescue and other housing complaints.
Wasden noted that 2009 was also a record-setting year for the Attorney General’s Office in overall consumer protection efforts.
“Through our enforcement actions, the consumer staff recovered a record $7,431,388 in restitution for Idaho consumers last year,” he said. “This equates to $12.14 recovered for each taxpayer dollar appropriated for consumer operations and extends to 19 years our record of recovering more money than we receive from the general fund. We also recovered nearly $6 million in civil penalties, fees and costs, also a record.”
Wasden said those amounts do not include the nearly $31 million the state received in 2009 pursuant to the tobacco settlement negotiated between the Office of the Attorney General and tobacco manufacturers in 1998. To date, the state has received more than a quarter of a billion dollars from the tobacco settlement.
“Altogether, the 13 people in our consumer protection division brought in $44 million for Idaho consumers and the state last year, while we spent only $833,000 on consumer operations,” Wasden said.
Last year, the Attorney General’s Office received nearly 1,900 consumer complaints, an 11 percent increase. Idaho consumers reported losses of two and a quarter million dollars. The Attorney General mediated more than 1,200 of those complaints and, as a result, recovered more than $175,000 for individual Idaho consumers.
“We’ve had an extremely productive year, and this very small and dedicated staff has delivered tremendous results for Idaho consumers and taxpayers,” Wasden said. “Although our resources are diminished by the current economic situation, I want to assure Idahoans that our efforts on their behalf will not diminish. We remain committed and dedicated to protecting consumers from fraud and protecting Idaho businesses by ensuring a level playing field in a fair and competitive marketplace.”