New Federal Effort Launched to Combat Loan Modification Scams

NeighborWorks was so pleased to learn yesterday that the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB), and the U.S. Department of the Treasury have joined forces to combat scams targeted at homeowners seeking to apply for the Home Affordable Modification Program (HAMP).

The joint task force issued this consumer fraud alert, which provides vulnerable homeowners with tips for avoiding mortgage modification scams. In addition to providing education programs to protect struggling homeowners, the federal agencies will work together and with law enforcement partners to investigate and shut down these scams, and will ensure the perpetrators pay for their crimes.

This collaborative federal effort strengthens the work we have been doing for the past two years through the Loan Modification Scam Alert Campaign to help vulnerable homeowners recognize the signs of scam and to learn where to turn for legitimate help.

Scam artists hide behind many titles — Loan Modification Consultant, Forensic Foreclosure Consultant, Short Sale Negotiator, to name a few — and they sometimes falsely represent themselves as government programs. Even trusted professionals like real estate agents or attorneys have been involved in loan modification scams.

It can be hard to spot a scammer, so the best way for homeowners to protect themselves is to know the signs. And the best way to shut down these scams is to report them. Legitimate help is FREE and available from a HUD-approved housing counselor.