WASHINGTON, DC – March 4, 2011 – (RealEstateRama) — In conjunction with National Consumer Protection Week (NCPW), March 6-12, NeighborWorks America, The Lawyers Committee for Civil Rights Under Law, HOPE Now, Fannie Mae, Freddie Mac and a coalition of national government agencies, nonprofit organizations and financial institutions are empowering homeowners to combat loan modification scams. This effort, the national Loan Modification Scam Alert campaign, is designed to help homeowners protect themselves against loan modification scams, find trusted help and report illegal activity to authorities. Since the campaign’s launch, more than 10,000 people have reported loan scams, and it’s believed that many more homeowners have been affected.
NeighborWorks America is an official partner of NCPW, the federally coordinated consumer education campaign that encourages individuals across the country to take full advantage of their consumer rights.
Millions of Americans continue to be at risk of losing their homes to foreclosure due to job loss and income reductions, as well as unsustainable mortgage loans. While many will seek relief in the form of reputable and certified loan modification services — already more than 1.1 million have sought help from HUD approved counselors sponsored by the National Foreclosure Mitigation Counseling program — too many will instead become victims of scams.
“Foreclosure rates in America remain too high, and are not expected to fall substantially in the months ahead underscoring the need for help,” said Eileen Fitzgerald, acting chief executive officer of NeighborWorks America. “This National Consumer Protection Week, the Loan Modification Scam Alert campaign is intensifying outreach efforts so that homeowners in distress seek the right help.”
The Loan Modification Scam Alert campaign has enhanced its social media consumer outreach with the development of an E-card that makes it simple for consumers to connect with their friends and family and provide the tips they need to recognize a loan modification scam. In addition, during National Consumer Protection Week, Loan Modification Scam Alert partners will make frequent posts to their blogs and websites, and to various social networking sites to reach as many consumers as possible with the right information. Several also will hold press conferences and other face-to-face outreach and education events. An ongoing list of activities will be available on the Loan Modification Scam Alert Campaign Facebook page.
“As the foreclosure crisis continues unabated we commend the great work of all of our coalition partners, and we are doubling our efforts to use the rule of law to inform consumers and to bring these scammers to justice,” said Yolanda McGill, senior counsel, Fair Housing & Fair Lending Project at the Lawyers’ Committee for Civil Rights Under Law. “The Lawyers’ Committee is gratified that the NCPW official website has linked to the reporting and enforcement tools on our website PreventLoanScams.org, highlighting this key resource in the fight against foreclosure rescue fraud.”
“Loan modification scams are a serious problem and homeowners need to be on the lookout so they can protect themselves — and their home. Homeowners need to know that there is never a fee to apply to the Obama Administration’s Making Home Affordable Program or other assistance from the federal government,” said Phyllis Caldwell, Chief of the U.S. Treasury Department’s Homeownership Preservation Office. “Homeowners who are struggling with their mortgage payments can learn more about the free resources available by visiting MakingHomeAffordable.gov.”
“Teaching borrowers to avoid fraud is fundamental to helping our neighbors avoid unnecessary foreclosure,” said Dwight Robinson, Senior Vice President of Corporate Relations and Housing Outreach at Freddie Mac. “We applaud and support the call to use National Consumer Protection Week to focus the public on the national efforts Freddie Mac, NeighborWorks and other leading organizations are taking to alert borrowers to foreclosure fraud.”
“Fannie Mae, along with its partners, is working to eliminate loan modification scams that often result in the unnecessary loss of a family’s home,” said Jeff Hayward, Fannie Mae’s Senior Vice President, National Servicing Organization. “This supports our ongoing commitment to providing distressed homeowners with early access to free counseling from trusted advisors, so they have the best possible chance of finding appropriate solutions to their mortgage challenges.”
“This is a nationwide problem and the message we want to send to homeowners is ‘do not pay anyone to have your loan modified.’ Quite simply, if it sounds too good to be true, it is. If you are seeking a loan modification, or other solution, there are an abundance of free resources. They are available from your mortgage company or from a trusted, HUD-approved nonprofit agency,” said the HOPE NOW Alliance Executive Director Faith Schwartz. “Mortgage assistance scams have cost American families millions of dollars, and aggressive consumer education on the issue is of paramount importance. HOPE NOW is working hard to get this message out to homeowners and we are proud to be part of this important initiative with our partners.”
Here are six red flags to indicate that a homeowner may be dealing with a loan modification scammer:
1. A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage. They may pocket your money and do little or nothing to help you save your home from foreclosure.
2. A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.
3. A company/person advises you to stop paying your mortgage company and pay them instead. Despite what a scammer will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.
4. A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand. A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.
5. A company claims to offer “government-approved” or “official government” loan modifications. They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. And, remember, you do not have to pay to benefit from government-backed loan modification programs.
6. A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.
Loan modification scams are proliferating at a rapid pace. Every day, scam artists prey on over-stressed homeowners who are facing foreclosure. These homeowners are losing thousands of dollars and their homes — lured by the promise of loan modification help.
“National Consumer Protection Week is an ideal time to ramp up our combined efforts and make as many homeowners as possible aware that knowledge is the best defense,” Fitzgerald said.
Lawyers’ Committee for Civil Rights Under Law
U.S. Dept. of Treasury, Homeownership Preservation Office
HOPE NOW Alliance