CONSUMER ALERT: HOUSING RIGHTS PROGRAM ASSISTS ARKANSAS CONSUMERS

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September 17, 2014

LITTLE ROCK – The mortgage crisis dealt a significant blow to the U.S. economy and affected many American consumers, including some Arkansans. Fortunately, the economy is recovering, and the banks and mortgage servicers that contributed to the crisis have been held accountable for their actions.

Two years ago, Attorney General Dustin McDaniel joined with other state attorneys general and the federal government to announce a multibillion-dollar settlement with the country’s five largest mortgage servicers. Of Arkansas’s share of that settlement, $2 million was directed to the state Access to Justice Commission to provide support and assistance to Arkansas consumers who have been adversely impacted by the crisis.

The Access to Justice Commission used the money to create the Housing Rights and Consumer Protection Program, which is operated by the Center for Arkansas Legal Services and Legal Aid of Arkansas. McDaniel issued this consumer alert today to increase awareness about this important program.

“The landmark mortgage settlement gave us a distinct opportunity to support a program that protects consumers from the types of misconduct and abuse that initially led to our investigation of mortgage servicers,” McDaniel said. “The program is only about a year old, but there has already been remarkable success on behalf of Arkansas homeowners.”

Legal-aid attorneys in the program can provide Arkansas consumers with advice on issues such as foreclosure defense and prevention, housing-related predatory lending practices and other issues related to safe and affordable housing. Consumers can visit www.arlegalservices.org/foreclosure for more information. Consumers may also call the statewide HelpLine at (800) 952-9243 to apply for services or see if they qualify under income eligibility guidelines.

The entirety of the $2 million distribution is being used for the Housing Rights and Consumer Protection Program. So far, the program has helped more than 2,000 consumers. Here are some examples of how everyday Arkansans are being assisted:

One consumer – a widowed grandmother --  saw her mortgage payment increase by nearly $300 a month because of an insurance requirement placed upon her by a mortgage company. She sought a loan modification but had difficulty obtaining the modification, even though she was eligible for a federal loan-modification program. Once she sought assistance through the Housing Rights and Consumer Protection Program, she received a loan modification that significantly decreased her monthly payment.

Another consumer was about to be foreclosed upon because of reverse mortgage that was allegedly signed by her mother. However, the signature on the reverse mortgage does not match her mother’s signature. Because of that, representatives of the program went to court to stop the foreclosure and the sale was halted.

Because of serious medical problems that resulted in decreased working hours, a consumer who had always paid her mortgage on time contacted her mortgage provider seeking to have her loan modified and her mortgage payment reduced. She hit dead end after dead end until she contacted the program, which intervened on her behalf. Her bank eventually agreed to a modification, thus preventing foreclosure on her home.

The Access to Justice Commission and the nonprofit Access to Justice Foundation work to provide equal access to justice to Arkansans in civil cases. Visit the Commission’s website at www.arkansasjustice.org.

Legal Aid of Arkansas and the Center for Arkansas Legal Services are nonprofit organizations that provide free legal services to low-income Arkansans with civil legal problems. Learn more at www.arlegalservices.org.

For more information about the National Mortgage Settlement or other consumer issues, visit the Attorney General’s Consumer Protection Division website, www.GotYourBackArkansas.org, or call (800) 482-8982.

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