Missouri Governor Blunt Announces Plan to Protect Missouri Homeowners from Foreclosure

New Consumer Protections Include Prison for Mortgage Fraud Offenders

January 14, 2008 -- JEFFERSON CITY - Under a new plan announced today by Missouri Governor Matt Blunt, those who commit mortgage fraud against Missouri homebuyers could soon be living in a new home themselves: prison.

Gov. Blunt announced new proposals to protect Missouri homeowners and strengthen the penalties against those who commit mortgage fraud. He also established a new free hotline for Missourians to report fraud and access information to protect themselves against foreclosure.

“Homeownership is an essential part of the American dream,” Gov. Blunt said. “For many Missouri families, buying a home is the biggest financial investment they will ever make. Our plan will help at-risk homeowners keep their homes by providing new consumer protections and creating new penalties for those who commit mortgage fraud including prison time and steep monetary fines.”

Gov. Blunt’s proposal includes legislation to further enhance consumer knowledge, protect against unscrupulous businesses that prey upon at-risk homeowners, and create new punishments for mortgage fraud. Gov. Blunt supports:

* Giving the Real Estate Commission and Real Estate Appraisers Commission power to suspend or revoke licenses for mortgage fraud

* Creating the crime of mortgage fraud, a class C felony, punishable by up to seven years in prison

* Enhancing notice requirements for foreclosure by requiring that homeowners at-risk are provided with a clear statement informing them of the hotline so that they may receive more information on how to avoid foreclosure

* Enhancing consumer protection laws to protect Missourians from exploitative foreclosure consultants

* Providing the commissioner of the Division of Finance power to issue cease-and-desist orders to stop mortgage fraud or exploitative business practices against at-risk Missouri homeowners

The Missouri Bankers Association voiced support for the measures cracking down on mortgage fraud. “The Missouri Bankers Association applauds the governor’s efforts to fight mortgage fraud,” said Max Cook, President of the Missouri Bankers Association. “The provisions in this initiative will go a long way in helping Missouri consumers avoid fraudulent mortgage related transactions. We also encourage regular communication between borrowers and lenders as it is a critical step in protecting Missouri consumers. Mortgage fraud can make the American Dream of owning a home into the American Nightmare.”

Gov. Blunt’s plan would also establish the creation of a free hotline (1-888-246-7225) that Missourians at risk of foreclosure can use to obtain information, materials, and contact information to help them avoid foreclosure. The hotline will operate within the Consumer Credit Section of the Department of Insurance, Financial Institutions, and Professional Registration (DIFP).

“Information is power,” said Doug Ommen, director of DIFP. “This hotline will ensure that Missouri homeowners at risk of foreclosure have all the information they need to strengthen their ownership.”

Beyond Housing, a non-profit which helps families achieve and sustain homeownership, applauded the new measures. “We are extremely pleased with the Governor’s proactive response to the critical issue of mortgage fraud and foreclosure here in Missouri,” said Chris Krehmeyer, President & CEO of Beyond Housing. “Far too many hard working families have lost their home unnecessarily, and these new protections and referral sources will be of great benefit to citizens of the state. We look forward to working with the governor and all our partners to help Missouri residents keep their dream of homeownership.”

Source: Missouri Governor

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