Federal Agencies Fight Modification Scams

Three government agencies are combining efforts to address mortgage modification scams through a joint task force.

With the announcement of the task force, the participating agencies – the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB), and the Treasury Department — released a consumer fraud alert to warn homeowners of modification scams.
“The goal of our consumer fraud alert is to empower homeowners with the knowledge of how to recognize and
avoid these scams,” said Christy Romero, deputy special inspector general for SIGTARP.
The agencies warn homeowners to beware of any company that requires advance charges to pursue loan modifications, offers money-back guarantees, or advises them to discontinue mortgage payments and/or contact with their servicer.
“Only your mortgage servicer has discretion to grant a loan modification,” the fraud alert emphasized.
The agencies stressed that applying for a modification through HAMP is free, and homeowners interested in pursuing a modification can call the Homeowner’s HOPE Hotline at 1.888.995.HOPE for more information and to make sure they receive help from a legitimate source.
“This new initiative builds on the work we have done with SIGTARP to date and other collaborative efforts throughout the federal government to educate homeowners about scams so they can protect themselves and their homes,” stated Tim Massad, Treasury assistant secretary for financial stability.
“Mortgage scams harm not only homeowners but legitimate businesses and the market as a whole,” said Richard Cordray, chief of enforcement for the CFPB.