Feds Serious About Foreclosure Scams
Posted: Wednesday, November 4th, 2009 at 2:48 pm
The state of the economy has already caused a drastic home foreclosure rate, but along with that have also come foreclosure scams. The Obama administration, which is cracking down, has announced a multi-agency effort to eliminate scams which prey on struggling homeowners.
“Just as this administration has intensified our efforts to help American homeowners, those who would seek to prey on the most vulnerable are intensifying their tactics as well, often through purported mortgage modification and foreclosure relief companies,” Treasury Secretary Tim Geithner said at an announcement in Washington. “These are predatory schemes designed to rob Americans of their savings and potentially their homes.”
The current number of FBI investigations on foreclosed homes is up 400 percent, compared to five years ago.
“We will shut down fraudulent companies more quickly than before,” said Attorney General Eric Holder. “We will target companies that otherwise would have gone unnoticed under the radar. And we will aggressively pursue individuals involved in mortgage rescue scams.”
Holder said the number of FBI agents investigating mortgage fraud cases has doubled and that the Treasury Department’s Financial Crimes Enforcement Network will combine all of its efforts to identify fraud suspects for civil and criminal investigation.
“The message is very simple: If you prey on vulnerable homeowners with fraudulent mortgage schemes or discriminate against borrowers, we will find you and we will punish you,” he said.
Federal Trade Commission chairman Jon Leibowitz said his agency warned 71 companies by mail about their suspicious ads that promised mortgage relief. These companies advertise to homeowners in distress, claiming to be able to negotiate with mortgage lenders and thereby enticing consumers to send mortgage payments directly to them.
“If you pay them instead of your mortgage company, you will find yourself on the fast track from distress to disaster,” Leibowitz said.
“Stay away from anyone who says they will save your home in return for money up front,” said Illinois Attorney General Lisa Madigan.
This week the Federal Reserve Board will start airing a 30-second ad in movie theaters in the seven states hit hardest by foreclosures, pointing people to the Federal Website for tips on getting help to avoid foreclosure.
The 30-second spot states: “Having trouble keeping up with your mortgage payments? Are you facing foreclosure? Before you do anything, you need to get information on how to avoid foreclosure scams. Don’t get taken advantage of. It shouldn’t hurt to get help. Go to FederalReserve.gov and click on ‘Five Tips for Avoiding Foreclosure Scams.’ Learn how to protect your home and avoid foreclosure fraud. It’s information you can trust from the Federal Reserve. Go to FederalReserve.gov and click on ‘Five Tips for Avoiding Foreclosure Scams.'”
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