New Campaign Empowers Rhode Island Homeowners to Combat Loan Modification Scams in 2010

Providence, RI – April 7, 2010 – (RealEstateRama) — For the growing number of Rhode Island homeowners who face the possibility of foreclosure, a new public education campaign is providing vital information to guard against loan modification scams, find trusted help and report illegal activity to authorities. 

The national foreclosure rate has reached an all-time high of 8.85 percent, and millions more foreclosures are expected in coming years. In the first quarter of 2010, there were more than 6,413 Rhode Island homes in foreclosure and another 11,728 threatened by foreclosure, an 8.5% rate according to analysis of Mortgage Bankers Association Data.

“It’s unfortunate that people who are already struggling financially are being targeted again by fast talkers looking to cash in on their troubles,” said Richard Godfrey, Executive Director of Rhode Island Housing. “Scammers know that people who are in danger of losing their home are vulnerable and looking for ways to get out. It is important for homeowners to know how to find an agency that is truly acting in their best interest and how to protect themselves from those who are looking to exploit them.”

Funded by Congress during the summer of 2009, NeighborWorks® America was charged with coordinating a “Loan Modification Scam Alert” campaign nationwide through its 235 community-based affiliates and other local, state and national partner organizations, including the Federal Deposit Insurance Corporation (FDIC), Department of Housing and Urban Development (HUD), the Federal Trade Commission, the U.S. Department of the Treasury, Fannie Mae, Freddie Mac and the Lawyers’ Committee for Civil Rights Under Law.

“Our campaign is designed to inform borrowers so that they have the information to fend off scammers who are trying to rob them of precious resources and educate others who may be in the position to give advice to those in financial distress,” said Marietta Rodriguez, Director of Homeownership Programs at NeighborWorks® America.

“An educated consumer is often the best defense. Knowing the warning signs is important for avoiding loan modification scams because the bad guys aren’t always easy to spot. They don’t lurk in dark shadows or operate out of a back alley. In fact, many times, these brazen scammers openly advertise their services and appear to be legitimate business people,” said FDIC Board Member and NeighborWorks® America Chairman of the Board Thomas J. Curry.

Together, Rhode Island campaign partners have come together to reach thousands of distressed homeowners in hundreds of communities at high risk for fraud activity. The campaign targets all audiences, but its resources are focused sharpest on those groups that have already seen high levels of scam activity, including seniors, Hispanics, African Americans and Asian Americans. Working closely together to launch this national public awareness campaign in Rhode Island are state and federal agency representatives and non-profit organizations including the FDIC, HUD, Rhode Island Housing, Housing Network of Rhode Island, Rhode Island Department of the Attorney General, Rhode Island Department of Business Regulation, Rhode Island Resource Commission, City of Providence, NeighborWorks Blackstone River Valley, West Elmwood Housing Development Corporation, Community Works Rhode Island, and Money Management International.

Rhode Island Attorney General Patrick Lynch said, “This campaign maximizes our efforts to protect Rhode Island residents from the scams being perpetrated by unscrupulous people posing as loan modification officers or foreclosure specialists who, in reality, are only scrambling to pocket the money from their victims and run.”

Information, resources and reporting capabilities are now available around the clock at www.LoanScamAlert.org by calling 888 995-HOPE (4673). The Housing Network of Rhode Island is the statewide contact for the campaign and can be reached at 401 521-1461 at their Pawtucket Office. The campaign uses real-life scam stories, collateral materials, print advertising, local radio PSAs, events, word of mouth and social media to draw special attention to the warning signs of a loan modification scam.

Homeowners are also urged to report scam activity at once to the proper authorities through the campaign Web site and hotline.

Attorney General Lynch added, “Borrowers must avoid any individual or firm asking for a fee in advance, guaranteeing a loan modification or telling you to pay them instead of paying the mortgage. Only a lender can guarantee a loan modification, and lenders do not charge.”

In Providence where foreclosure rates are among the highest in the state, scammers are out there trying to take advantage of people in a tough spot. The campaign is making it easier for homeowners in distress to fight back and help us shut scam artists down.

“The foreclosure crisis isn’t close to being over in Rhode Island. We need to stay vigilant in protecting homeowners from scams and unfair practices that victimize those who are already struggling to hang onto their homes. Education is definitely the best defense against this threat,” stated Mayor David N. Cicilline.

Homeowners wishing to report a suspected scam operation may fill out a complaint form online by going to www.LoanScamAlert.org and selecting “How to Report Scams.”

The Rhode Island public awareness campaign will promote a variety of special events and initiatives throughout the 2010 calendar year.

“One important decision every homeowner can make is to know the signs and get the facts about loan modification scams,” said Felicia Diaz, Director, NeighborWorks Blackstone River Valley Homeownership Center. “Anyone can be a victim, but you don’t have to be.”

NeighborWorks® America creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. Since 1991, we have assisted nearly 1.2 million low- to moderate-income families with their housing needs. Much of our success is achieved through our support of the NeighborWorks network ? more than 230 community development organizations working in more than 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. In the last five years, NeighborWorks organizations have generated more than $15 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals. www.nw.org.