CFPB, Agencies Form Task Force to Crack Down on Mortgage Modification Scams

American Banker
December 2, 2011
Davidson, Kate

A new task force will investigate and shut down scams that specifically target homeowners attempting to complete loan workouts through the Home Affordable Modification Program. The Consumer Financial Protection Bureau, the Treasury Department, and the Special Inspector General for the Troubled Asset Relief Program created the joint task force to educate struggling homeowners and help them to recognize modification scams. The task force has issued a consumer fraud alert with tips for avoiding scams and will distribute it directly to homeowners eligible for HAMP. The alert informs borrowers where and how they can apply for the program and reminds them that only their mortgage servicer has the authority to approve a modification. Additionally, it cautions consumers to conduct due diligence if an upfront payment is requested, money-back guarantees are offered, or they are advised to cease mortgage payments or stop contacting their servicer.
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