Prevent Loan Scams
About Us

Loan Modification Scam Prevention Network

In the midst of the current economic turmoil and foreclosure crisis, millions of distressed homeowners have become vulnerable targets to unscrupulous and sometimes criminal third-party scammers, con-artists, and thieves.  These homeowners, desperate to keep their homes, are at risk from individuals and companies posing as "loan modification specialists," some of whom are the very people who previously peddled subprime loans.  The alleged "rescuers" employ various scams with disastrous consequences for homeowners: phantom foreclosure counseling, lease-back or repurchase scams, fraudulent refinance, fraudulent loan modification, bankruptcy foreclosure, and reverse mortgage fraud.  While waiting for the promised relief, homeowners not only lose their money but often fall deeper into default and lose valuable time.  

Federal, state and local law enforcement, as well as national, state and local housing, legal aid, consumer protection and civil rights non-profit organizations are working hard to stop the proliferation of loan modification scammers.  However, these scammers are highly mobile and easily able to move from one community to another.  In addition, resources both at the governmental level in prosecuting scammers and legal aid organizations in assisting or representing individual homeowners who may have been scammed are stretched thin. 

Response to the Crisis

As a result, a coordinated national campaign, the Loan Modification Scam Prevention Network (LMSPN or Network) was created to strengthen the fight against these scammers and support existing efforts at the national, state and local levels. The lead organizations of the effort include Fannie Mae, Freddie Mac, the Lawyers' Committee for Civil Rights Under Law (Lawyers' Committee), Homeownership Preservation Foundation (HPF) and NeighborWorks America, among others, with representatives from key governmental agencies, such as the Federal Trade Commission, the U.S. Department of Housing and Urban Development (HUD), U.S. Department of Justice, the U.S. Treasury Department, the Federal Bureau of Investigation, and state Attorneys General offices, as well as leading non-profit organizations from across the country.  

This new, broad coalition includes a two-part response.  First, NeighborWorks is leading a national media and outreach campaign to educate homeowners and the public on potential scams.  (Please visit the NeighborWorks' website on this effort  Second, the Lawyers' Committee is leading an effort to increase reporting and prosecution of alleged scammers to support ongoing enforcement efforts at the federal, state and local levels.

The Loan Modification Scam Prevention Network

The Lawyers' Committee, along with our partners, is leading a large-scale mobilization of resources in a comprehensive campaign to enhance and support existing state and local efforts, increase scam reporting, educate homeowners, and work with law enforcement.  This comprehensive campaign includes:

  • Increased Reporting of Loan Modification Scams and Creation of National Database - Increasing the number of complaints submitted by homeowners is a top priority of the Network. Complaints against alleged scammers can now be submitted via a simple online form (available in hard copy) by homeowners anytime, housing counselors and advocates working with homeowners, at foreclosure prevention events, and through the Homeowners' HOPE Hotline (1-888-995-HOPE). A national database (National Loan Modification Scam Database) has been created to house these complaints, which supports federal, state and local law enforcement efforts and provides a comprehensive picture of the loan modification scam crisis nationwide. 
  • Support of State and Local Efforts - The Network supports ongoing state and local law enforcement efforts by sharing complaint information, providing access to national data to determine whether alleged scammers are operating across jurisdictions and state lines, working with active coalitions, educating the public and homeowners, and supporting commonsense legal and policy reforms.
  • Increased Enforcement Actions - It is anticipated that as a result of the national Loan Modification Scam Database, enforcement activities will increase at the state and local level not only by prosecutors, but also state regulatory agencies. In addition, the Network will coordinate closely with governmental law enforcement and local legal organizations representing victims of scams to file high impact litigation where appropriate.
  • Direct Homeowner Contact - Trained volunteers will contact homeowners who have reported scams to conduct a more substantive intake to collect detailed information about scammers and how they operate and transmit this information to appropriate law enforcement agencies.
  • Public Education - A strategic public education effort is underway, utilizing both online and offline tools, to use the information in the Database and the experience of leaders on the ground to help homeowners identify and avoid scams and paint the clearest picture of the havoc wrought by loan modification scammers.

Increased Reporting of Loan Modification Scams and Creation of National Database

Critical to shutting down scammers is increasing the number of complaints that law enforcement receives.  The Network has created an effective, yet simple means to do so.  First, homeowners are able to report complaints against alleged loan modification scammers themselves via a short public form on the Network's website, or by calling the Homeowners' HOPE Hotline (1-888-995-HOPE).  Second, housing counselors and lawyers assisting homeowners in modifying their loans can report complaints via the online form (or paper version).  Counselors at foreclosure prevention events across the country are also filing online complaints on behalf of homeowners.  A National Loan Modification Scam Database has been created by the Network to house these complaints.  Sophisticated and user-friendly, this national web Database is building a comprehensive record of loan modification scams for use in private enforcement and public education campaigns by local and national partners.

This new Database is vital for several reasons.  For one, unlike federal, state and local governmental agencies, which cannot share complaint data with non-profit organizations, this Database is available to our partners, both public and private, thereby increasing the possibility of private enforcement actions. (All complaints, pending homeowner approval, are automatically sent to the Federal Trade Commission's Sentinel Database, which is available to federal, state and local law enforcement agencies.) In addition, because scammers operate across state and county lines, collecting complaints in a national database, instead of being captured in silos by jurisdiction, allows the Network and its partners to better analyze trends and get a broader picture of the activities by scammers.  The number of complaints filed will increase across the nation due to a simplified intake questionnaire available for HUD certified counselors, hotlines, legal aid lawyers and organizations holding clinics.  Instead of only referring homeowners to other sources, complaints are filed on-site, reducing the chance of homeowners not following through on their own.  Finally, we will save valuable resources at the state and local level by having this database available for use at no cost.

Support of State and Local Efforts

The primary objective of this effort is to bring additional resources to bear in support of existing foreclosure prevention and loan scam programs at the state and local level, including empowering them with current information on scamming and potential victims.  Providing local programs with an effective referral capacity is critical to a coordinated national crack down on loan modification scammers because they easily operate across state lines, shut down quickly when under pressure, and reopen at another address or in another jurisdiction.  The Network is working with ongoing efforts to increase scam reporting, analyze complaints collected in the Database, spearhead local public education efforts, push for strong anti-scamming policies and rules, support governmental enforcement, and bring private enforcement actions when necessary.  This coordinated work at the state and local level, supported by the resources and expertise of national organizations, will make it more difficult for scammers to continue to operate.

Increased Enforcement Actions

While legal volunteers will not represent individual homeowners through the Network (nor will they enter into an attorney-client relationship), it is strongly anticipated that there will be increased enforcement actions against scammers through both private and government efforts. The Network is working closely with state and local law enforcement officials to share complaints in the Network's Database and any identified analysis of scamming patterns.   (All complaints, pending homeowner approval, are automatically sent to the Federal Trade Commission's Sentinel Database, which is available to federal, state and local law enforcement agencies.  In addition, the Network is working with state and local prosecutors to share complaints directly with them when appropriate.)  In addition to increased prosecutions of scammers, we anticipate increased regulatory actions by state agencies.  If broad patterns of illegal scamming are detected in gathering information from victims, the Lawyers' Committee, among others, will consider bringing high impact litigation through its pro bono legal network.   

Direct Homeowner Contact

Using the Network's Database, the Lawyers' Committee is identifying homeowners (prioritized by location, type of scam, and other factors) to be contacted by trained volunteers to gather additional vital information about the nature of, and documents related to, their situation.  This direct contact with homeowners allows the Network to collect even further detailed information about how scammers operate to aid analysis and enforcement efforts.  All homeowners receive information via the Network's eSupport system.  Through this system, the Network sends emails to homeowners with local information on how to avoid a scam, news on enforcement actions against scam individuals and companies, and local resources available to help them fight scamming and receive assistance in modifying their mortgages.  Homeowners are also able to provide additional information about their situation via an online complaint form.

Public Education

Scammers are most effective when they are able to prey on an unsuspecting populace.  Homeowners who are not fully educated about this issue are more likely to fall victim to scammers and less likely to report suspicious activity.  To that end, building on the outreach campaign the Network is coordinating a strategic earned media campaign using the information collected through the Database and experiences of local leadership to educate the public.  The media campaign publicizes resources available to homeowners and information on filing a complaint, common tactics used by scammers, tips on how to avoid a scam, news on enforcement actions against scam individuals and companies, and other updates on the Network's activities. 

This website -- - was launched to serve as a nationwide clearinghouse for loan modification scam information on complaints filed, laws and regulations, and enforcement actions.  In addition to the online complaint form that will enter data directly into the Network's Database, the website provides homeowners with state-by-state information about the rules, regulations and resources available to them, information on how to avoid a scam, and news and information on enforcement efforts.  To further paint the picture of the loan modification scam problem, the website will also provide a public portal into the Network's Database and allow users access to non-personal information that may be searched and sorted by jurisdiction, scam problem, and other criteria. 

Click here to learn how to become a partner of the Loan Modification Scam Prevention Network.