Mortgage Fraud and Personal Bankruptcy Can Go Hand In Hand

The state of Minnesota is cracking down on unscrupulous lending practices as the housing market recover sputters along. In its most recent action, the Minnesota Department of Commerce fined Mortgage Connection Inc. $40,000 and revoked the company’s state license for illegally taking advance fees to modify mortgages. The Department of Commerce also barred the company’s owner, Augustus Odoom, from residential mortgage origination and servicing in the state.

According to the state, Mortgage Connection had charged 36 Minnesotans who who were looking to modify their mortgages more than $2000 in advance fees. In the state of Minnesota it is illegal to collect advance fees for those kinds of services.

The company can avoid the fine if it refunds those fees to consumers within 30 days.

The enforcement comes at a time when more than 14 million American homeowners are in foreclosure or delinquent on their mortgage payments, and when mortgage fraud perpetrated by lenders and other predatory businesses have forced record numbers of Americans into personal bankruptcy.

This is a good first step but both the state and the federal government are going to have to do more to address the fallout from the mortgage crisis. There can simply be no sustained and genuine economic recovery in most Americans continue to struggle to pay their bills and more and more find themselves with no other option than to file for personal bankruptcy.

If this story describes you or a loved on, contact the Minnesota personal bankruptcy attorneys of Lord & Faris for a free consultation. We can work through the process with you and help you take the necessary steps to get your finances back in order, including helping you pursue a legitimate mortgage modification of necessary. Without a strong advocate in your corner you could fall victim to a scam like the one stopped by the Department of Commerce. Let us be that advocate for you.

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