Treasury Department Warns About Scams Targeting Homeowners

Scammers make false promises to struggling homeowners

Three government departments recently joined forces to investigate fraudulent mortgage modification schemes, where companies charge struggling homeowners a fee in exchange for false promises of lowering the homeowner’s mortgage debt or payments through HAMP, a foreclosure prevention program funded by the Troubled Asset Relief Program (TARP).

The government created the Home Affordable Modification Program (HAMP) to assist homeowners seeking to avoid foreclosure.  Naturally, scammers have followed, offering homeowners “guarantees” to save their homes and/or lower their mortgages, typically for a fee.

The government departments involved in the task force are the Treasury Department, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Consumer Financial Protection Bureau (CFPB).

Many of these scam artists pretend they have direct communication with your mortgage provider and/or the government, which they do not. The Homeowner’s HOPE™ Hotline can be reached at 1-888-995-HOPE(4673) for information about the Making Home Affordable © Program and to speak with a HUD-approved housing counselor.

The Treasury Department seeks to inform those seeking mortgage modifications:

• You can apply to the federal Home Affordable Modification Program (HAMP) on your own or with free help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD).  Applying to the program is always FREE.  For more information on how to apply, call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (1-888-995-4673) or visit www.MakingHomeAffordable.gov.
• Only your mortgage servicer has discretion to grant a loan modification.  Therefore, no third party can guarantee or pre-approve your HAMP mortgage modification application.
• Beware of anyone seeking to charge you in advance for mortgage modification services – in most cases, charging fees in advance for a mortgage modification is illegal.
• Paying a third party to assist with your HAMP application does not improve your likelihood of receiving a mortgage modification.  Accordingly, beware of individuals or companies that ask you for payment and tout success rates or claim to be “experts” in HAMP.
• If an individual or company claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government in correspondence or on the Web, you should check the connection by calling the Homeowner’s HOPE™ Hotline.
• Beware of individuals or companies that offer money-back guarantees.
• Beware of individuals or companies that advise you as a homeowner to stop making your mortgage payments or to not contact your mortgage servicer.

By working with HUD-approved counselors, homeowners can avoid the many scam artists that have flocked around this new government program.