TopMortgage Compliance Update (1)

December 9, 2011


CFPB Issues Consumer Fraud Alert

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SIGTARP (Office of the Special Inspector General for the Troubled Asset Relief Program), CFPB (Consumer Financial Protection Bureau), and the Treasury (U.S. Department of the Treasury) have formed a joint task force to combat Home Affordable Modification Program (HAMP) mortgage modification scams. HAMP is a foreclosure prevention program funded by the Troubled Asset Relief Program (TARP) and administered by the U.S. Department of the Treasury.

The task force released a Consumer Fraud Alert on December 1, 2011, entitled Tips for Avoiding Mortgage Modification Scams. [Library]

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Purpose of Joint Task Force

Consumer Fraud Alert - Advice

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Purpose of Joint Task ForcePurpose  
SIGTARP, the CFPB, and Treasury have put together this partnership in order to protect taxpayers by investigating and shutting down these scams and by providing education programs to vulnerable homeowners. The aforementioned Alert is meant to protect homeowners from HAMP-related mortgage modification scams. The Alert will also be provided directly to homeowners who are eligible for HAMP.

Investigations will include mortgage modification schemes, among other things, in which companies charge homeowners a fee in exchange for false promises of lowering the homeowner's mortgage debt or payments through HAMP. For our other Newsletters that address mortgage fraud, please visit our publications Library.
 Consumer Fraud Alert - AdviceConsumer       
The following outline, addressed to consumers, provides the task force's advice to homeowners, with respect to being aware of con artists and scams that promise to save their homes and lower their mortgage debt or payments:
  • You can apply to the federal Home Affordable Modification Program (HAMP) on your own or with free help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD). Applying to the program is always FREE.
  • For more information on how to apply, call the Homeowner's HOPE™ Hotline at 1-888-995-HOPE (1-888-995-4673)  
  • Only your mortgage servicer has discretion to grant a loan modification. Therefore, no third party can guarantee or pre-approve your HAMP mortgage modification application.
  • Beware of anyone seeking to charge you in advance for mortgage modification services - in most cases, charging fees in advance for a mortgage modification is illegal.
  • Paying a third party to assist with your HAMP application does not improve your likelihood of receiving a mortgage modification. Accordingly, beware of individuals or companies that ask you for payment and tout success rates or claim to be "experts" in HAMP.
  • If an individual or company claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government in correspondence or on the Web, you should check the connection by calling the Homeowner's HOPE™ Hotline.
  • Beware of individuals or companies that offer money-back guarantees.
  • Beware of individuals or companies that advise you as a homeowner to stop making your mortgage payments or to not contact your mortgage servicer.
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Tips for Avoiding Mortgage Modification Scams
Consumer Fraud Alert

December 1, 2011

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