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HUD launches campaign to educate consumers about mortgage fraud

[Apr 20, 2011.]


A new Department of Housing and Urban Development (HUD) campaign helps consumers recognize and avoid being scammed in home mortgage modification schemes. Titled "Know it. Avoid It. Report it.," the campaign launched in Los Angeles, Miami and Chicago combat scams that target desperate homeowners.

Mortgage refinancing requires credible help

HUD hopes the campaign encourages homeowners who are facing foreclosure to get help from legitimate housing counselors and agencies. Mortgage fraud often involves shady individuals or companies who make a lot of promises that sound too good to be true.

Scammers may promise that they can get your mortgage payments lowered for a fee. They also may try to involve you schemes that can strip you of home equity. Some scams involve illegal upfront fees for obtaining mortgages. Scammers may also claim to be affiliated with government agencies

Reaching communities to discuss mortgage fraud

HUD wants homeowner support to stop mortgage fraud targeted at the Hispanics, African-Americans and the elderly. In some cases of fraud, people target affinity groups to bilk people out of money. HUD plans to reach homeowners through education and outreach, as well as with help from federal, local and nonprofit partners.

Mortgage fraud tipoffs

There are a lot of different mortgage fraud schemes, but four common signs are:

  1. Pressure to sign over the title to your home as part of a scheme to avoid foreclosure

  2. Being asked to lie on mortgage loan documents when applying for financing

  3. Being asked to pay a lot of fees before getting a loan or to prevent foreclosure

  4. Being told to stop making monthly payments on a mortgage loan to qualify for a loan modification

If you believe you've been targeted by a mortgage scam, it is important to report it to the authorities. You can file a complaint online or call 1-888-995-HOPE.

Finally, an important thing to remember is that if you do have mortgage questions, it is best to go to a reputable housing agency in your community or a counselor approved by HUD. Don't rely on people who advertise on light poles or stick flyers in your mailbox.


About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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