NeighborWorks America Recognizes National Consumer Protection Week
by Warning Homeowners Against
Loan Modification Scams
In
conjunction with
National Consumer Protection Week (NCPW), March 7-13, NeighborWorks
America and its growing coalition of national government agencies, nonprofit
organizations and financial institutions
are
empowering homeowners to combat loan modification scams. The effort is an
extension of the organization’s national Loan Modification Scam Alert
campaign, designed to help homeowners protect themselves against loan
modification scams, find trusted help and report illegal activity to
authorities. NeighborWorks America is an official partner of NCPW, a
coordinated consumer education campaign that encourages individuals across
the country to take full advantage of their consumer rights.
An
estimated 4.5 million Americans are at risk of losing their homes to
foreclosure. While many will seek relief in the form of loan modification
services, too many will instead become victims of scams.
“Foreclosure rates in America are now at an all-time high and so is the need
for help,” said Kenneth D. Wade, chief executive officer of NeighborWorks
America. “This National Consumer Protection Week, NeighborWorks is urging
community groups and businesses across the nation to join in the effort to
educate homeowners about how they can guard against loan modification
scams—a fast-spreading epidemic in need of immediate attention. ”
Scams
aren't always easy to spot – but it helps if you know the warning signs to
look for. Here are six red flags to indicate that you 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 unsuspecting homeowners who are facing foreclosure. These
homeowners are losing thousands of dollars and their homes—lured by the
promise of loan modification help.
“Our
campaign is based on the belief that knowledge is the best defense, which is
why we’re equipping homeowners with the tools they need to minimize their
risk and stop scammers in their tracks,” Wade said.
