Consumer Protection

Every day, individuals use thousands of goods and services – bank accounts, gift cards, overdraft protection, credit cards – the list is long. Individuals engage in millions of transactions. We know the obvious ones ~ car purchases, ~ auto repairs, ~ gym memberships and ~ mortgage loans.

Less recognized are activities that sometimes impact consumers because of the actions of others ~ identify theft, ~ phone fraud, ~ debt collection practices and ~ telemarketing scams. Many of these activities are covered by either federal consumer laws or state unfair and deceptive law practices.

Nevada Fair Housing Center, (NFHC) works on behalf of consumers to provide easy to understand information on many common consumer transactions and to alert the public when less than scrupulous companies seek to misrepresent information or services. In the area of lending, we focus on helping to protect consumers, through education and enforcement. We work cooperatively with other agencies to disseminate information and when needed make appropriate referrals.

Mortgage Scams

The great thing about this country is its entrepreneurial spirit. The bad thing about this country is the entrepreneurial spirit of people with less than good intentions. Nature hates a vacuum. Where there is a scarcity of resources, something comes to fill it.

Since last year, foreclosure scams have increased. A consumer receives the public notice of default and immediately, the vultures begin to circle. Letters, calls, and visits — all offer huge promises with no assistance. Although many of these offers sound like a magic bullet, beware.

How can you recognize a mortgage scam? Here are some red flags:

  • Phantom counseling services (requests for payment to obtain a loan modification)
  • Internet counseling services (immediate payment over the internet required for loan modification services)
  • Power of attorney (companies that ask you to sign a power of attorney under the disguise of needing it to contact the lender)
  • Bait and switch (requests to sign documents for assistance that actually transfer ownership of the property to the company or individual)
  • Rent to own scams
  • Guarantees to stop the process with payment from you to their company
  • Companies that request you make your mortgage payment to them instead of the lender
  • Companies that advice you to stop making mortgage payments

Nevada Fair Housing Center works closely with government agencies to stop mortgage fraud. For additional information, please visit http://foreclosurehelp.nv.gov and the Federal Trade Commission (FTC) at www.ftc.gov.

Anti-Predatory Lending

What is predatory lending? As strange as it may sound, there is no national standard that clearly defines the term. There are however characteristics of loan products and practices which are designed to dupe the public.

What are some of these practices?

  • Charging high fees
  • Excessive prepayment penalties
  • Excessive yield spread premiums charges for phantom services
  • Steering
  • Loan flipping
  • Mandatory arbitration
  • Failure to disclosure loan terms and rate
  • Single premium credit insurance
  • Excessive yield spread premiums
  • Repeated loan flipping
Before you sign any loan document, review it carefully. Until there is a national standard, the caveat of buyer beware is a good rule of thumb. NFHC will assist you with reviewing your loan at no cost.

Don't Borrow Trouble

"Don't Borrow Trouble" was piloted in Boston by Mayor Thomas M. Menino, Freddie Mac and the Massachusetts Community Banking Council. Freddie Mac expanded the campaign to additional locals. On January 17, 2001, Nevada Fair Housing Center formed a partnership with Freddie Mac to offer the program.

Today, NFHC offers the program in Nevada, Washington, Utah, Arizona and Colorado. The program uses a combination of ads, billboards, and public service announcements (in English and foreign languages) to educate borrowers about predatory lending practices and encourage them to reach out to reputable organizations for assistance. Our goal is simple – prevention. NFHC strives to help families avoid predatory lending, fraud and financial scams. In other words, if you have received an offer that sounds too good to be true, beware.

Purpose

"Don't Borrow Trouble" seeks first to help consumer 'avoid trouble'. But, what if the deed is done, what next? Step one is to diagnose the specific problem. Here are some questions to consider:

  • Was the loan made without consider the borrower's income?
  • Was the loan intentionally made even though the borrower could never repay?
  • Were all required documents clear, complete, and provided at the time of closing?
  • Is the loan substantially over LTV (loan-to-value)?
  • Does the loan include credit life insurance? Was this insurance calculated into the loan?
  • Is there a pre-payment penalty? Is it reasonable?
  • Does the mortgage company have a history of engaging in predatory lending or improper lending activity?
  • How did the lender solicit your business?
  • Are certain areas of your community or specific classes of individuals targeted by the lender (i.e. the elderly, physically impaired)?
  • Does the mortgage company properly apply mortgage payments when made?

Step two is the hard part – Negotiating and developing a financial action plan to get back on track.

Eligibility Requirements

Assistance is provided to all clients regardless of income. The charge for services is a firm commitment to complete the program and time. Contact a NFHC for more information.

Your Credit

There is a file about you! When you applied for a credit card, a personal loan, or insurance—this file was created. It contains information on where you live and work, how you pay your bills, and if you have been sued, arrested, or filed for bankruptcy. Consumer Reporting Agencies (CRA's) are companies that collect and sell this information. The credit bureau is the most common type of consumer reporting agency.

The types of information credit bureaus collect and sell include:

  • identification and employment information
  • payment history
  • inquiries
  • public records
  • bankruptcies
Your Rights – Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act requires that credit reporting agencies report accurate information. If you request access to the information in your report, the credit reporting agency must supply everything in the report to you, including the sources of the information. The three major credit bureaus are:

Disputes

If you are denied credit, insurance, or employment based on a report supplied by a credit reporting agency, you must be given the name, address, and telephone number of the agency that provided the report. Your may dispute the report or line with each agency or by mail. A sample letter is attached.

Sample Letter Format for Your Use

Date

Your Name
Your Address
Your City, State Zip Code

Complaint Department
Name of Credit Reporting Agency
Address
City, State Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment,, bankruptcy, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matters(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your Name

The Federal Trade Commission ~ www.ftc.gov ~ is the federal agency charged with protecting consumers from many of these practices.