WASHINGTON (CN) – A push by the government to pursue and prosecute foreclosure rescue scammers has already resulted in $1.8 million in restitution, administration officials said Monday. “These scammers are kicking people when they’re down,” added Federal Trade Commission Chairman Jon Leibowitz.
U.S. Attorney General Eric Holder added prosecutorial muscle to the initiative, saying, “If you prey on vulnerable homeowners with fraudulent mortgage schemes, we will find you and we will punish you.”
The scams typically target homeowners seeking assistance under the Obama Administration’s Making Home Affordable program, which provides $75 billion to help modify unaffordable mortgages and reduce interest rates.
Shaun Donovan, Secretary of the Department of Housing and Urban Development, said the program is expected to help between 7 and 9 million Americans restructure or refinance their mortgages. “A homeowner never has to pay to participate in Obama’s plan,” he added.
Lisa Madigan, the Attorney General of Illinois, warned homeowners to stay away from anyone who wants money up front, explaining that in many states it is illegal for loan modification companies to charge fees before all the promised services are complete.
Mortgage scammers often take the initial fee without following through on calling the lender, modifying the loan, or representing the homeowner in court, as promised. “All they do is take your money” said Madigan.
She also warned of guaranteed success in altering the mortgage, and said to be wary of even official looking websites.
So far, the Federal Trade Commission has sent warning letters to 71 companies found running suspicious ads and Holder announced an increase in the number of agents investigating mortgage scams.
The FTC, Treasury Department, the Department of Justice, and the Department of Housing and Urban Development also launched an education campaign, distributing fliers to educate homeowners on how to identify a scam.
Homeowners are urged to visit www.makinghomeaffordable.gov or to call 1-888-995-HOPE for free foreclosure counseling. They should only use HUD approved housing counselors and report suspected scams to the FTC.
After making the announcement at a well-attended press conference, the administration officials refused to answer questions. One reporter on her way out shouted, “What about questions? Hellooooooooooooo!”