New Campaign Empowers Rhode Island Homeowners to Combat Loan Modification Scams in 2010

For the growing number of Rhode Island homeowners who face the possibility of foreclosure, a new public education campaign is providing vital information to guard against loan modification scams, find trusted help and report illegal activity to authorities.

The national foreclosure rate has reached an all-time high of 8.85 percent, and millions more foreclosures are expected in coming years. In the first quarter of 2010, there were more than 6,413 Rhode Island homes in foreclosure and another 11,728 threatened by foreclosure, an 8.5 percent rate according to analysis of Mortgage Bankers Association Data.

“It’s unfortunate that people who are already struggling financially are being targeted again by fast talkers looking to cash in on their troubles,” said Richard Godfrey, executive director of Rhode Island Housing. “Scammers know that people who are in danger of losing their home are vulnerable and looking for ways to get out. It is important for homeowners to know how to find an agency that is truly acting in their best interest and how to protect themselves from those who are looking to exploit them.”

Funded by Congress during the summer of 2009, NeighborWorks America was charged with coordinating a “Loan Modification Scam Alert” campaign nationwide through its 235 community-based affiliates and other local, state and national partner organizations, including the Federal Deposit Insurance Corporation (FDIC), Department of Housing and Urban Development (HUD), the Federal Trade Commission, the U.S. Department of the Treasury, Fannie Mae, Freddie Mac and the Lawyers’ Committee for Civil Rights Under Law.

“Our campaign is designed to inform borrowers so that they have the information to fend off scammers who are trying to rob them of precious resources and educate others who may be in the position to give advice to those in financial distress,” said Marietta Rodriguez, director of Homeownership Programs at NeighborWorks America.

“An educated consumer is often the best defense. Knowing the warning signs is important for avoiding loan modification scams because the bad guys aren’t always easy to spot. They don’t lurk in dark shadows or operate out of a back alley. In fact, many times, these brazen scammers openly advertise their services and appear to be legitimate business people,” said FDIC Board Member and NeighborWorks America Chairman of the Board Thomas J. Curry.

Information, resources and reporting capabilities are now available around the clock at http://www.loanscamalert.org/ and by calling 1-888-995-HOPE (4673).

The NeighborWorks newsroom as more information about the campaign launch in Rhode Island.

NeighborWorks America Salutes Top Producers With 2010 CEO Award

NeighborWorks America today announced the 2010 honorees for the NeighborWorks America CEO award for outstanding performance in homebuilding, rental housing development, residential rehabilitation, housing counseling, homeownership promotion, volunteering and resident participation.

“These organizations exemplify the high caliber work that all of the more than 235 organizations in the NeighborWorks network do each day to create strong, vibrant and sustainable communities,” said NeighborWorks America CEO Ken Wade. “We are proud of their accomplishments and thankful for their exemplary contributions to NeighborWorks America’s mission to create opportunities for people to live in affordable homes, improve their lives and strengthen their communities.”

Nine NeighborWorks organizations received the CEO Award. Learn more about them in the NeighborWorks Newsroom.

HUD Expands Abandoned and Foreclosed Definitions Under NSP

HUD has announced changes to its Neighborhood Stabilization Program (NSP), which helps communities acquire, rehabilitate and re-sell foreclosed and abandoned properties more quickly and help prevent further decline in hard-hit neighborhoods.

Effective immediately, HUD will classify a property as “foreclosed” if the owner is at least 60 days behind on the mortgage or is 90 days or more delinquent on tax payments. HUD is also expanding the definition of an “abandoned” property to include homes where no mortgage or tax payments have been made for at least 90 days. A property is also abandoned if a code enforcement inspection has determined that the property is uninhabitable and the owner has not taken corrective action within 90 days.

HUD says these expanded definitions will increase the reach of NSP by allowing more properties to qualify, remove existing barriers caused by market conditions, and help state and local grantees to meet a Congressional requirement that they obligate all of their NSP1 funding by September of this year.

More information is available on HUD’s Web site.

Unemployed, Underwater Borrowers Get Help Through HAMP Expansion

On March 26, the Obama Administration announced a series of adjustments to the Home Affordable Modification Program (HAMP) and to the Federal Housing Administration (FHA) programs to assist homeowners who have been affected by the current economic crisis.

Borrowers get assistance in three ways through the HAMP expansion: The unemployed can get a three-to-six-month forbearance on their mortgage payments, after which they will be evaluated for a loan modification. Banks will get financial incentives to reduce the principal balances of delinquent, underwater borrowers. And borrowers who are current on their mortgages, but underwater, can refinance into loans backed by the FHA.

Marietta Rodriguez, deputy director of National Homeownership Programs and Lending at NeighborWorks America, said that the recent changes are a positive move and will hopefully ease some of the pressure that those seeking re-employment are feeling.

In an interview with CNNMoney.com Rodriguez added that the expansion will help convince people to stay in their homes.

"For many borrowers, it's really hard to justify figuring out a payment plan for a property that's so underwater," she said.

Read communication about these changes from HUD Assistant Secretary for Housing/Federal Housing Commissioner David Stevens.

More information about the impact of these changes is available at CNNMoney.com.

New Videos Available for Consumers Seeking Loan Modifications

Homeowners who are struggling to make their monthly mortgage payments are looking for relief and straight answers about the loan modification process. A set of videos were recently released that addresses some of their more pressing concerns.

Q&A Series About Loan Modification: NeighborWorks Loan Modification Scam Alert campaign recently asked homeowners to submit their questions about loan modification. Five frequently asked questions emerged and answers were captured for homeowners on video.

Your To-Do List for Getting a Permanent Loan Modification: This video from the Making Home Affordable program tells homeowners how to get a trial loan modification and what they must do to convert the trial into a permanent loan modification.

Avoiding Loan Modification Scams: This video from Making Home Affordable emphasizes for homeowners who are facing foreclosure that help is available and it is free – one of the most important things they need to know to avoid being victims of loan modification scams. Homeowners are provided with several other tips and resources, including NeighborWorks Loan Modification Scam Alert campaign web site, loanscamalert.org.