Senator Kohl : New Type of Financial Fraud Has Sprung Forth From Country’s Mortgage Crisis

WASHINGTON – Today U.S. Senate Special Committee on Aging Chairman Herb Kohl (D-WI) held a hearing on the rise of financial scams across the country, the result of a sharp increase in foreclosures. Across the nation, foreclosures have increased by 95 percent in the past year. Foreclosure rescue scams target low-income and senior homeowners already facing a financial difficulty. Often these financial predators will claim that they can help “save” the home of a senior experiencing foreclosure, when in fact they plan to walk away with both the title and equity of the home. The hearing will review how rescue scams work, who they impact, and what the government can do to eliminate the scams.

“The mortgage foreclosure crisis is real. Most communities across the country are experiencing both the primary and secondary effects,” said Chairman Kohl. “We need to determine how federal and state governments can best protect seniors and other targeted populations from these ruthless financial predators.”

Chairman Kohl announced that he would soon introduce legislation to help homeowners across the country avoid these foreclosure rescue scams, especially in states where no law exists to prohibit or regulate these practices. Kohl also acknowledged the plan recently announced jointly by the mortgage industry and administration to help seriously delinquent borrowers stay in their homes. “While this is a step in the right direction,” Kohl said, “there are concerns that this help will not reach as many troubled homeowners as possible.”

A webcast of the hearing will be available on the Committee webpage: http://www.aging.senate.gov/

Ashley GlacelPress SecretarySpecial Committee on AgingSenator Herb Kohl, ChairPh: (202) 224-5364 Cell: (202) 340-3299 http://www.aging.senate.gov/