The Loan Modification Scam Prevention Network has launched a national campaign to prevent loan modification scams through public education, complaint reporting and coordination with local, state and federal enforcement agencies. The group is led by Fannie Mae, Freddie Mac, the Lawyers' Committee for Civil Rights Under Law and NeighborWorks America.
As part of the campaign, the group has launched www.PreventLoanScams.org, which is designed to help consumers and support legal efforts. The site serves as a clearinghouse for loan modification scam information on complaints filed, laws and regulations, and enforcement actions.
Mortgage modification and related scams increasingly are in the news as homeowners struggle in the economic downturn. See this story and also this story, as well as this story published here last week.
Loan modification scams prey on homeowners in distress by guaranteeing to help the homeowner receive a modification of their mortgage to save their home. Frequently, the borrowers pay money up front but receive no help at all and their home is lost to foreclosure.
"Receiving complaints about loan modification scammers throughout the country is crucial to supporting enforcement efforts," says Joseph Rich of the Lawyers' Committee for Civil Rights Under Law. "By encouraging homeowners to take action and report fraud, we hope to help federal, state and local enforcement officials bring actions against scammers.
The site includes an electronic complaint form that consumers can fill out if they believe they are the victim of a scam. The site also names individuals and organizations identified by enforcement agencies to have allegedly committed a loan modification scam, and includes information on how to avoid a loan modification scam.