California attorney general promises to tackle homeowner scams

State Atty. Gen. Jerry Brown pledged Saturday to investigate and prosecute businesses that charge struggling homeowners fees to help get more favorable terms for repayment of their mortgage loans.

“We have lawyers, we have investigators, and we will go after those who break the law by falsely representing what they can do,” Brown said at a congressional hearing in South Los Angeles.

Brown, a Democrat planning to run for governor next year, vowed to focus specifically on bogus television ads that lure homeowners into expensive mortgage consulting deals that are useless.

“We will document the rip-offs that are over the mass media as best we can,” he said.

Brown joined Rep. Maxine Waters (D-Los Angeles), who ran the hearing at Los Angeles Southwest College, in reminding homeowners that there is no need to pay fees to consultants offering to persuade a lender to relax payment terms.

“Don’t pay anybody for mortgage modification,” Waters said. “Call your bank and tell them you want it.”

Brown was one of a string of witnesses Saturday at a foreclosure-crisis hearing of the House Financial Services Subcommittee on Housing and Community Opportunity, chaired by Waters.

Several witnesses voiced concern about tenant evictions from apartment buildings that lenders have seized in foreclosure. In 2007 and 2008, roughly 6,500 of the 21,000 residential buildings in Los Angeles that went into foreclosure were multifamily dwellings, said Mercedes Marquez, general manager of the city Housing Department.

While welcoming President Obama’s plans to stop the foreclosure crisis, Waters, Brown and several housing advocates still called for expansion of public programs to keep homeowners from losing their property and to stop a new surge in homelessness.

“Now is the time,” Brown said, “to take care of these unmet needs as we take care of the consequences of the crooks, the scam artists, and all the big shots that have made all this money.”

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michael.finnegan@ latimes.com