Housing Authorities Reveal Loan Modification Scams Targeting Homeowners
Desperate American homeowners seeking to retain their properties nearing foreclosures are falling prey to frauds purportedly veiled to modify their mortgage plans, reports said, adding up to their woes.
In a Sunday report, the USA Today said the scheme already victimized thousands across the United States, causing long-time homeowners to eventually lose their houses while some were compelled to shell out thousands of dollars as scammers convinced them of ‘working tricks’ to shun foreclosure.
Housing advocates have estimated that more than 700,000 property owners lost their homes to foreclosures last year, with a significant number assumed by authorities to have resorted to promised loan modification schemes outside of the official channels.
Housing officials have admitted that many homeowners were completely unaware that foreclosure assistance was made available by the federal government through the Troubled Asset Relief Program (TARP).
The federal initiative, which includes the U.S. Home Affordable Modification Program (HAMP), carries a war-chest of close to $30 billion, exclusively designed by federal authorities to aid homeowners in averting foreclosures.
Unfortunately, many who face foreclosures were totally clueless on available facilities for them without actually reaching further down into their pockets.
Christy Romero of SIGTARP told the USA Today that “HAMP is a free program, so homeowners need to be wary of anyone who charges them for their work on a HAMP application.”
Yet many were duped by scam artists, who ruthlessly talked their way on the elderly and even sick people to convince them to avail of their services, just because they lack the know-how on actual loan modification procedures.
“Homeowners also need to be wary of anyone who guarantees them they will get a successful modification through HAMP,” Romero warned.
Fortunately though, many of the scammers were apprehended by SIGTARP, which conducted high-level crackdowns through joint coordination with the U.S. Treasury Department and the Consumer Financial Protection Bureau.
While some of the fraud artists came out on the streets and approached unsuspecting victims, most of the operators, Romero said, were online based and can be seen putting up advertisements on major websites.
As of November last year, SIGTARP reported that 125 online con artists were closed down and prosecuted by state and federal authorities, with 17 successful convictions so far and some culprits given prison terms by the courts.
In Michigan alone, state officials revealed that 28 cases involving modification loan scams were resolved since 2009, resulting to total damage payment of more than $200,000 to homeowners picked out by individuals or firms engaged in the racketeering plot.
Officials said that the unfortunate incidents would have been prevented had the victims took time in availing the services of foreclosure counselors sanctioned by both the state and federal authorities.
The best part about these trained counselors, Romero said, is that they render their services free of charge.
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