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.