Officials Crack Down on Loan Modification Scams
The government is cracking down on scammers who take advantage of desperate homeowners facing foreclosure.
Federal and state officials are trying to put an end to fraudulent companies that charge borrowers up-front fees of $1,000 to $3,000 to modify their loans. For the most part, the modifications never happen.
"These are predatory schemes designed to rob Americans of their savings and potentially their homes," says Treasury Secretary Timothy Geithner. "We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar."
The Federal Trade Commission says 71 companies ran suspicious advertisements and complaints should filed at the Federal Loan Modification Law Center and Bailout.hud-gov.us, both based in California, and Clearwater, Fla.-based Home Assure LLC.
Not every loan modification business is a fraud, but "swimming around in those waters are a lot of sharks," says Jim Carr, chief operating officer at the National Community Reinvestment Coalition.
Source: The Associated Press, Alan Zibel and Christopher S. Rugaber (04/06/2009)
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