Queens pols write anti-scam bill
Posted on November 4, 2009 by Ivan Pereira in City Council, District 27, District 31
City Council Speaker Christine Quinn (l.) and Councilman Leroy Comrie talk about the new city bill designed to crack down on fraudulent mortgage consulting firms. Photo courtesy Leroy Comrie
The city will be cracking down on scammers who have been targeting helpless homeowners who had their properties foreclosed, City Councilmen Leroy Comrie (D-St. Albans) and James Sanders (D-Laurelton) announced last week.
The southeast Queens leaders were co-sponsors of a Council bill that passed Oct. 28 that requires mortgage property consultants to disclose state regulations on any advertisement posted in the city.
Residents in neighborhoods such as Jamaica, St. Albans and Springfield Gardens have lost hundreds of thousands of dollars and their homes to unscrupulous agencies that charge them for loan consulting but never give them the service, according to Comrie.
“Nearly every day a constituent enters my district office desperate for assistance to save their home. In that desperation, they have often turned to a consultant who for a fee takes advantage of their plight,” the councilman said in a statement.
Fliers and advertisements are posted throughout southeast Queens for foreclosure help with nothing more than a phone number, according to Comrie.
The companies are not always trustworthy, but many homeowners in the area reach out to them because they are at the end of their rope and do not want to be homeless, Sanders said.
“If you are a property consultant trying to get rich off of the misery of people in need, this bill was crafted just for you,” Sanders said in a statement.
Since last year mortgage consultants are regulated by the state and required to provide specific information on their practices. The bill, slated to be signed by the mayor, mandates that companies must disclose that their consultants cannot perform services without a contract, accept a payment before completion of services or take power of attorney from a homeowner, according to the Council.
The consultant must also tell the client that his or her work does not guarantee that a mortgage will be foreclosed. The bill will fine businesses between $2,500 and $5,000 for not disclosing the information, according to the Council.
Similar scams involving unscrupulous lenders who gave subprime mortgages to homeowners led to the massive surge in foreclosures in southeast Queens over the years, according to Comrie. Of the 318 city foreclosure auctions that took place in July, 63 percent were properties in Queens, the councilman said.
More than a quarter of those foreclosed properties were in southeast Queens, according to Comrie.
The Council said it is working with the state attorney general’s office to identify fraudulent consultants and possibly prosecute them.
“Preying on desperate New Yorkers who are in danger of losing their homes is simply deplorable,” said Council Speaker Christine Quinn (D-Manhattan). “It not only devastates these already struggling families, it also threatens to further destabilize neighborhoods hit hardest by foreclosures.”
Reach reporter Ivan Pereira by e-mail at ipereira@cnglocal.com or by phone at 718-229-0300, Ext. 146.
