Loan modification scams highlighted

The ongoing foreclosure rescue scam crisis was highlighted this week during a press conference to identify top consumer complaints in New York.

During this National Consumer Protection Week event, representatives offered guidance on avoiding financial scams, including loan modification scams.

The Loan Modification Scam Alert Campaign educates homeowners about the warning signs that indicate a person or company offering assistance may be a scam. The top three warning signs of a scam are any person or company that asks for fees in advance of fully providing services, guarantees they’ll stop a foreclosure or get your loan modified and tells you to stop paying your mortgage company and to pay them instead.

“Scams present a real threat to homeowners who are afraid of losing their homes, especially now that new bank settlements and government programs are in the headlines,” said Deborah Boatright, Northeast regional director, NeighborWorks America. “At times like this, we often see a spike in activity among companies who pretend to be authorized by the government, but are, in fact, scams.”

Help is available at www.loanscamalert.org or through the Lawyers’ Committee for Civil Rights Under Law (PreventLoanScams.org).

Since the launch of the Loan Modification Scam Prevention Network complaint database in February 2010, more than 21,000 consumers have reported foreclosure rescue scams totaling more than $60 million in lost money, more than doubling last year’s figures of 10,000 complaint reports and $27 million in lost money.