This past Tuesday, SIGTARP announced that two men have pleaded guilty to conspiracy charges for operating a nationwide online foreclosure rescue scheme that defrauded many distressed homeowners. The two men used their business, which operated under multiple names, to convince struggling homeowners to sign over the deeds to their homes in order to avoid foreclosure. However, after falsely telling homeowners they were negotiating certain terms with their lenders, they rented out their homes to tenants unaware of the scheme in order to make a profit. 

Additionally, they submitted fraudulent loan modification applications to mortgage lenders via the Home Affordable Modification Program (HAMP) without the homeowner’s knowledge or consent; this allowed them to temporarily postpone the foreclosure process in order to receive more rental payments. Sadly, many borrowers who did business with this company eventually lost their homes to foreclosure.

While bringing scam artists to justice is always welcome news, there are still many perpetrators out there that continue to exploit financially distressed homeowners. Indeed, the Financial Crimes Enforcement Network recently reported that the number of foreclosure rescue scams in 2012 increased to 4,400 from 2,800 in 2011.

HPF encourages all homeowners to learn the warnings signs of a scam in order to protect themselves from becoming a scam victim.

If you or someone you know has been the victim of a scam, please report it to our anti-scam team by calling 888-995-HOPE (4673). The information we receive is then used by law enforcement agencies, such as SIGTARP, during their investigation into fraudulent organizations.

Tip #1 | Check to see if you qualify for the various government-sponsored programs for homeowners

There are several government programs available to homeowners who have been affected by the housing crisis. For example, the Obama Administration’s Making Home Affordable (MHA) program offers a refinancing option for homeowners who are underwater on their mortgage as well as a modification program for those who are struggling financially and may qualify for a modified payment plan. Both of these programs expire at the end of 2013, so now is the time to see if you qualify.

There are also special programs for service members, those who are unemployed, and homeowners who may be looking to make a graceful exit from their home via a short sale. HPF counselors, who are available by calling 888-995-HOPE (4673), can walk homeowners through all of these programs and their corresponding application processes.

Tip #2 | Use free online resources to evaluate your finances

Take advantage of the financial tools and information that are available for free online. Money Management International (MMI), one of HPF’s counseling agency partners, created FinancialLiteracyMonth.com, a website that supports Financial Literacy Month by offering free financial wellness webinars, worksheets, and eBooks.  Additionally, HPF’s website includes several tips on managing credit cards, utility payments, and education expenses via its “Homeowner’s HOPE Hotline Guide to Saving Money” page; the website also offers a large list of government and financial industry resources that can help struggling borrowers.

Tip #3 | Avoid scams

Unfortunately, there are many unsavory individuals out there who prey on financially-strapped consumers, either by convincing them into financial products that can be harmful or offering “too good to be true” debt rescue schemes. Before entering into any financial agreement with an organization, do your research to make sure that the organization is legitimate. Even a quick “Google” search can reveal negative consumer reviews on a particular organization or an “F” ranking from the Better Business Bureau, which are immediate red flags.

If you believe that you have been the victim of a financial scam, report it to the Consumer Financial Protection Bureau (CFPB). Foreclosure-related scams can also be reported to HPF’s anti-scam team at 888-995-HOPE. These complaints are then used by law enforcement agencies during their investigations into fraudulent activity.

As financial columnist Michelle Singletary mentioned in the Washington Post earlier this month, April is the perfect time to revisit your finances, considering that you’ve likely had to compile all of your financial information in order to file your taxes. We couldn’t agree more, which is why we hope you will use this month to learn more about personal finance and apply the knowledge you gain to make better-informed financial decisions.

HPF frequently sees the same level of trepidation among homeowners when they first call our housing counseling HOPE Hotline at 888-995-HOPE (4673). Homeowners are initially reluctant to reach out for mortgage help for many reasons: they no longer trust their banks and servicers; the processes and programs confuse them; or they are fearful of being rejected for a program for the first, second, or third time. Underwater homeowners, many of whom purchased their homes at the peak of the market and may owe hundreds of thousands more than their homes are now worth, may feel trapped and not know that programs like HARP are available. And seriously struggling homeowners often tell our counselors that they are afraid to contact their servicer because they think it might speed up the loss mitigation process. The reality is, the sooner a homeowner reaches out for help, the more solutions that are available.

When the HARP program was announced as part of the Making Home Affordable initiative, which also includes HAMP (the Home Affordable Modification Program), HPF was designated to be the “call-to-action” for the program, meaning homeowners interested in either program can call HPF’s Hotline to speak with a housing counselor who will guide them through the various options and help begin the application process. Working with an independent third-party counselor is proven to have better housing outcomes, making it the best option for those who are looking for any form of mortgage relief.

For more information on mortgage refinancing or modifications via HARP or HAMP, please call HPF’s HOPE Hotline at 888-995-HOPE (4673).

Mr. Segal’s February 23 column particularly resonated with me.  In January, he was contacted by a robocaller offering an opportunity to lower his credit card interest rates.  Mr. Segal was immediately suspicious of the offer and decided to investigate the company.  It turns out that the company is run by a Florida couple who, according to Mr. Segal, control other outfits that were sued by the attorney general of Arkansas for violating various laws, including the Telemarketing Consumer Fraud and Abuse Prevention Act.

Mr. Segal is understandably outraged that the company continues to find new ways to operate, but he shouldn’t be.  Stamping out individuals bent on preying on unsuspecting consumers is akin to playing Whac-A-Mole – you stamp them down and they often instantly appear elsewhere.

HPF’s HOPE Hotline has received more than 30,000 reports of alleged mortgage scams in the past three years.  Many of the scamsters are repeat offenders – they get charged and then reemerge doing business under a different name.  They know how to circumvent the legal system and are quite sophisticated marketers.  Indeed, when Mr. Segal asked the robocaller where he was located, the person knew to terminate the call.

So take a bow, Mr. Segal, for doing your part to protect consumers in advance of National Consumer Protection Week.  And if you want to help stamp out the rapidly growing legion of mortgage scamsters, tell your readers to call the HPF HOPE Hotline at 888-995-HOPE (4673) to report suspected mortgage fraud. Reported scams are put in a database that is accessed by various law enforcement agencies.  And let your readers know that, if they are in need of FREE loan modification counseling, they can get it simply by calling the HPF HOPE Hotline.

Anyone who demands upfront fees for loan modification counseling is not worth listening to. Especially if the person making the offer is a robocaller.

As a partner of the Loan Modification Scam Prevention Network – a national anti-scam effort comprised of multiple organizations that runs the Loan Modification Scam Alert Campaign – HPF is supporting NCPW by educating homeowners on loan modification scams and directing them to free, legitimate mortgage resources, including our HOPE Hotline.

HPF reminds consumers that one of the leading signs of a loan modification scam is when an individual or organization requires an upfront fee for a loan modification service; doing so is illegal, which is why consumers can call our professionally trained counselors to receive loan modification counseling free of charge.

HPF also encourages consumers to be wary of web-based loan modification services that “guarantee” modifications, since only lenders can guarantee a mortgage solution.

If you or someone you know has been the victim of a scam, call 888-995-HOPE (4673) to speak with an HPF counselor for free. You can also visit our scam warning signs page to learn more about how to avoid being scammed.

Click here to read the news release about the Loan Modification Scam Prevention Network’s support of National Consumer Protection Week.

Unfortunately, online loan scams like these continue to trip up struggling homeowners. HPF’s anti-scam counselors have collected nearly 30,000 scam complaints in total and continue to receive hundreds of calls each week from homeowners who suspect they are the victim of a foreclosure rescue scam, many of which involve a company that operates online. While scam organizations use a wide range of tactics to get in front of distressed homeowners, including traditional marketing methods like sending out flyers or making cold calls, they’ve become increasingly aggressive online, where they use targeted advertising to zero in on consumers searching with keywords like “loan modification” or “foreclosure help.” And as scam organizations get smarter about how to digitally target homeowners, consumers continue to live more and more of their lives online – and that include managing their finances or searching for mortgage solutions.

When searching online for mortgage help, HPF has several tips. If an organization is claiming to be affiliated with the government or a nonprofit, check to see if the web address ends in “.gov” or “.org.,” respectively. That’s an easy way to weed out many unscrupulous for-profit companies that may use a “.com” address.  Additionally, check to see if the company is accredited with the Better Business Bureau (BBB); if not, or if the company has complaints or negative reviews on BBB or other consumer review websites, it may be a red flag. Other warning signs of foreclosure avoidance scams can be found online here.

The very, very best way for homeowners to protect themselves against scam organizations is to avoid them entirely by calling an HPF counselor – not only can counselors guide you through all of the options that are available for your unique housing circumstances, but they do it all for FREE. Call HPF at 888-995-HOPE (4673) today to get started.

HPF’s anti-scam hotline, which can be reached by calling our Homeowner’s HOPE Hotline at 888-995-HOPE, receives hundreds of calls each week from homeowners who believe they may have been victims of a loan scam. The stories our anti-scam counselors hear are heartbreaking – people borrowing money from family members to pay a scam organization that disappears overnight, or mortgages falling into default as a homeowner allocates next month’s mortgage payment for a promised modification, later discovering that their lender was never even contacted. Many of these real-life tales are featured on the website of the Loan Modification Scam Alert Campaign, an awareness initiative launched by NeighborWorks America in partnership with HPF and other housing affiliates.

The most important tip to know to avoid foreclosure avoidance scams? If a person or organization asks for an upfront payment, beware! Asking for advance fees for loan modification services is ILLEGAL and a telltale sign of a scam. While lawyers are technically allowed to charge a retainer in advance of legal services, note that around half of reported scam activity involves attorneys or individuals claiming to offer “legal services.” Another major warning sign is a company or person guaranteeing to stop a foreclosure; in fact, no one other than your lender can guarantee that you will be able to avoid a foreclosure. A more detailed list of scam warning signs is available on the HPF website by clicking here.

If you believe you have been the victim of a scam, please call the Hotline at 888-995-HOPE (4673) to report it. The information you share with our anti-scam team will be used by law enforcement agencies as part of their investigation into these organizations.

Indeed, we’ve seen a whopping 60 percent increase in calls from homeowners reporting suspected loan scam activity in the last year alone.  A number of them take advantage of federal relief programs as their “hook” to reel in unsuspecting victims resulting in homeowners paying an average of nearly $3,000 to a scam artist.

As Colleen Hernandez, our CEO, recently reported:  “Regretfully, every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification.  Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost.  Make no mistake:  these are scammers.  They are quick to make empty promises to guarantee loan modifications or foreclosure avoidance and even quicker to take homeowners’ money.  As the Consumer Financial Protection Bureau warns, “If it sounds too good to be true, it probably is.”

Some of these scammers even try to hijack our name and logos to fool vulnerable borrowers in need of mortgage assistance.  Don’t be fooled — the only number to call to reach HPF for counseling assistance is the Homeowner’s HOPE Hotline at 888-995-HOPE.

Protect yourself.  Know the warning signs of potential mortgage scams, which we’ve posted here.