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03/08/12

NeighborWorks America Warns Homeowners That Mortgage Rescue Scams May Sound Like New Government Foreclosure Help Programs

WASHINGTON, DC, Mar 07, 2012 (MARKETWIRE via COMTEX) -- The Loan Modification Scam Prevention Network (LMSPN) in conjunction with National Consumer Protection Week (NCPW), March 4-11 is alerting homeowners to combat loan modification scams, especially those that may appear to be help from one of the various new foreclosure assistance programs recently announced by the government. This effort, led by NeighborWorks' national Loan Modification Scam Alert campaign, the Homeownership Preservation Foundation's Homeowner's HOPE Hotline and the Lawyers' Committee for Civil Rights Under Law's Prevent Loan Scams campaign, is designed to help homeowners protect themselves against loan modification scams, find trusted help and report illegal activity to authorities. Since the coalition's launch two years ago, more than 21,000 people have reported loan scams in the Lawyers' Committee's national Loan Modification Scam database, and it's believed that many more homeowners have been affected. The six most important loan modification scam warning signs can be found at www.loanscamalert.org .

NeighborWorks America is an official partner of NCPW, the federally coordinated consumer education campaign that encourages individuals across the country to take full advantage of their consumer rights.

In the past few months, two important sources of foreclosure help have been announced by the federal government: the Independent Foreclosure Review program created to ensure that finished foreclosure actions were correctly managed, and a multi-billion mortgage servicing settlement that could provide money to help homeowners reduce their mortgage payments. Through information collected by the Loan Modification Scam Prevention Network, the coalition knows that incidences of alleged fraud associated with these two programs are on the rise.

Millions of Americans continue to be at risk of losing their homes to foreclosure due to job loss and income reduction, as well as unsustainable mortgage loans. While many will seek relief in the form of reputable and certified loan modification services -- already more than 1.3 million have sought help from HUD approved counselors sponsored by the National Foreclosure Mitigation Counseling program -- too many will instead become victims of scams.

"Foreclosure continues to be a problem in America, as do ever-changing foreclosure related scams, which recently have begun to take on the appearance of legitimate federal and state help programs," said Eileen Fitzgerald, chief executive officer of NeighborWorks America. "This National Consumer Protection Week, the Loan Modification Scam Alert campaign is intensifying outreach efforts so that homeowners in distress seek the right help."

"Loan modification scams are a serious problem, and we continue to work with our federal and state partners to shut them down," said U.S. Treasury Department Assistant Secretary for Financial Stability Tim Massad. "Homeowners should remember that there is never a fee to apply to the Obama Administration's Making Home Affordable Program or other assistance from the federal government."

"Millions of distressed homeowners have become vulnerable targets to criminal third-party scammers, con artists, and thieves," said Ed Jennings, Jr., Regional Administrator for HUD in Atlanta. "One should never have to pay for foreclosure counseling or assistance, that's why we need homeowners to be vigilant by seeking out HUD-approved housing counseling agencies to obtain help and avoid being scammed."

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