Illinois Attorney General talks about foreclosures, consumer fraud

Illinois Attorney General Lisa Madigan traveled to the metro-east Tuesday to talk to local civic leaders about assisting homeowners facing foreclosure and other consumer concerns.

Historically, the attorney general's office received 20,000 calls a year concerning consumer-related issues. Since the economic collapse about over four years ago, that number of inquiries has risen to almost 33,000 a year, Madigan said.

"The best thing we can do is prevent people from being victims of consumer fraud in the first place," she said. "With the downturn in the economy, and the rise in unemployment ... we've seen, unfortunately, folks who can't necessarily make money legitimately, turn to illegitimate ways of doing it."

When she started, telecommuter fraud was the most common issue. Now, she said she doesn't know of that would rank in the top 10 among the issues her office hears about and investigates. Today, most issues are credit-related and related to mortgages and debt collectors.

That has lead to a home ownership helpline to inform Illinois homeowners about mortification modification programs and other assistance programs.

Madigan said the $25 billion federal settlement reached Feb. 7 with five of the nation's largest lenders was over so-called "robo-signing" practices -- not filing all of the required paperwork in processing foreclosed properties. That settlement has provided Illinois with $1 billion in benefits for loan modification programs and approximately $100 million in cash.

Already $20 million has been spent for legal aid programs, she said. The settlement covered an estimated 1.8 million borrowers whose mortgages are owned or serviced by these lenders.

Madigan called the gathering "Consumer Fraud 101," which helps local community government representatives, church leaders and others how to help the citizens they come in contact with.

"It's the people who are in a position to talk to other people to make sure that the folks have this information because the number one thing that we can do is we can prevent people from being scammed," Madigan said.