The Treasury Secretary, Tim Geithner and U.S. Attorney General, Eric Holder are getting tough on loan modification scams, or so they say. A new initiative was announced this week on the Feds desire to work with State law enforcement to shutdown predatory loan modification companies who prey on foreclosure victims.
The wake of all the publicity surrounding the Obama Plan called “Making Homes Affordable”, it appears many unscrupulous players are now creating websites and other print marketing materials with fraudulent claims to lure in those seeking foreclosure assistance.
Treasury Secretary, Tim Geithner said,
“American homeowners desperately need the relief this program offers, but the very last thing they need is to be taken advantage of as they try to hold on to their homes. This Administration is deeply committed not just to providing at-risk homeowners with assistance but also to cracking down on anyone who seeks to defraud them.”
The real problem it seems are the upfront fees loan modification companies (read scams) charge before any services are performed. Another possible fraudulent act is promising a loan modification is forthcoming. Many companies are using pseudo-government sounding names to allow the foreclosure victim to believe the company is part of the government or an “authorized’ participate in government assistance programs.
Attorney General Eric Holder said,
“The Department of Justice’s message is simple: if you discriminate against borrowers or prey on vulnerable homeowners with fraudulent mortgage schemes, we will find you, and we will punish you.”
The FTC got into the act as well with Jon Leibowitz, Chairman of the FTC saying,
“We’re enforcing the law against these scam artists who are deceiving consumers while they’re down; we’re putting others on notice that unless they change their ways, they’re next; and we’re working with other government agencies, non-profits, and mortgage servicers to reach out to our neighbors in distress with the details of how and where to get help.”
HUD Secretary Shaun Donovan added,
“We have families on the edge of foreclosure that are being offered things that are too good to be true, and we will take every measure we can to educate and protect consumers and homeowners, bring these scams to light, and work to prevent con artists from exploiting the housing crisis,”
To represent State involvement, Illinois Attorney General Lisa Madigan gave a statement saying,
“We have repeatedly found that these foreclosure rescue operations are swindling desperate homeowners out of money they can’t afford to lose,” said Attorney General Madigan. “Struggling homeowners need to know that free help is available. The 24 lawsuits I have filed prove foreclosure rescue operators don’t help. They don’t call your lender, they don’t modify your loan, and they don’t represent you in court if you’re in foreclosure. All they do is take your money. By combining our powers, state and federal authorities are sending a clear message to these mortgage rescue scammers: It is not a question of if we’ll come after you; it is only a question of when.”
You can read the entire press release all the above quotes were culled from it you like, just click here.
Folks, if you believe anybody can “guarantee” you a loan modification, you’re dangerously naive.
If you believe the governments efforts to save you from predatory people is more important than your own responsibility to protect yourself, you’re dangerously naive.
These crooked players are out in force and I have witnessed on my blog just how many folks loan mod scammers have ruined. But this effort by the Obama administration is a day late and a dollar short.
Know this: YOU must negotiate with your servicer or lender to get a loan modification and potentially save your home. There is no short-cut.
Do your research. Get educated on the process and you can start with a web search on your servicer, on how to write hardship letters, and even on Obama’s Make Homes Affordable plan which has loan modification pieces in it.
Be persistent and follow through. You can do it yourself.
Until next week…