Florida’s extreme foreclosure rate has led some to take advantage of homeowners with so-called “foreclosure rescue” schemes and mortgage fraud. State Attorney General Bill McCollum announced his bid for governor last week, drawing on 20 years in Congress and a three-year tenure as state attorney general that’s been shaped by the collapse of the state’s real estate industry.
While his real estate resume is otherwise scant, McCollum’s work on mortgage and foreclosure fraud could shed light on what his bid for Tallahassee’s top job would mean for the industry if he wins. His position as the Republican contender was solidified Thursday when Agriculture Commissioner Charles Bronson withdrew from the race. McCollum is expected to square off against likely Democratic challenger Alex Sink, the state’s chief financial officer.
As attorney general, McCollum, 64, who lost a run for the U.S. Senate in the 2000 Republican primary, sued several companies presenting themselves as “foreclosure rescue companies.” These companies charged upfront frees to ostensibly make mortgagees’ existing loans more affordable, yet often left homeowners worse off than they started, sometimes costing them title to their homes. In 2007, the attorney general started a mortgage fraud task force to address what has become a nationwide problem.
The next year, McCollum sued National Foreclosure Management, charging them with fraud amounting to almost $1.7 million against 80 homeowners.
“I think the attorney general has a grasp and understanding of what many people are going through today in Florida,” said Senator Mike Fasano, the Republican representing the 11th district and the president pro tempore of the Florida Senate. “What the attorney general wanted to avoid was people being taken advantage of. Some of the foreclosure companies are legitimate and do a good job, but there are some bad apples who collect money from individuals who are truly desperate.”
Fasano said much of the fraud was being conducted against the Hispanic community in Orlando.
“Bill McCollum recognized it, and immediately went after it,” he said. “I think he has been aggressive in going after these individuals.”
Governor Charlie Crist, now running for the U.S. Senate, in 2008 signed a law, proposed by McCollum and sponsored by Fasano in the senate, requiring far greater disclosure to prospective mortgagees and formalizing the agreement process for any foreclosure rescue agreement.
The legislation required that foreclosure rescue companies could not collect any money before providing services, gave customers 10 days to rescind contracts, and made sure that all the fine print was made big and bold instead.
Before his election as the state’s attorney general in 2006, McCollum was a member of the U.S. House of Representatives for 20 years, centering his efforts on terrorism, intelligence and crime, which boosted his credentials to be the state’s top attorney, but did less to burnish them on real estate.
In 1997, as a member of Congress, he voted in favor of a bill revamping public housing and encouraging a greater income mix of tenants. The bill granted those of more moderate incomes access to public housing.