F E D E R A L D E P O S I T I N S U R A N C E C O R P O R A T I O N
ALSO INSIDE
Good News for Savers:
Congress Extends $250,000
Deposit Insurance Coverage
Through 2013
How to Protect Yourself
from Foreclosure Frauds,
Easy Money Schemes
and Other Costly Deals
Spring 2009
PLUS: More About Mortgage Modification Programs • Shopping for a CD • FDIC Coverage of Pre-Paid Cards Cards
Buyer BewareBuyer Beware
ALSO INSIDE
Good News for Savers:
Congress Extends $250,000
Deposit Insurance Coverage
Through 2013
How to Protect Yourself
from Foreclosure Frauds,
Easy Money Schemes
and Other Costly Deals
Spring 2009
PLUS: More About Mortgage Modification Programs • Shopping for a CD • FDIC Coverage of Pre-Paid Cards Cards
Buyer BewareBuyer Beware
2 Spring 2009FDIC Consumer News
Foreclosure Rescue and Loan Modification Scammers
Still Prey on Stressed Homeowners: Our Latest Tips
As previously reported in FDIC
Consumer News, many homeowners
having difficulty making their monthly
mortgage payments are being targeted
by criminals who charge large upfront
fees and falsely “guarantee” to rescue a
home from foreclosure. In some of the
worst cases, homeowners have become
victims of identity theft or were tricked
into signing away their ownership
of a house. Because mortgage rescue
scams continue to be a big problem, we
offer our latest tips on how to protect
yourself.
Try to deal only with lenders,
businesses and other organizations
you already know or that have been
recommended. If you can’t pay your
mortgage, ask your lender or loan
servicer (the company that collects
payments and performs other work for
the lender) about options for avoiding
foreclosure that include lowering your
monthly payment by reducing the
interest rate, extending the term or
adjusting the loan balance.
You don’t need to pay a lot of
money for help or information.
If you think you need assistance
working with your lender, get help
from a trained, reputable housing
counselor who can help you for no
charge or a small fee. Find one through
groups such as NeighborWorks
America (www.nw.org) or by calling
1-888-995-HOPE (4673). Or, for a
referral to a local counseling agency
certified by the U.S. Department of
Housing and Urban Development
(HUD), visit www.hud.gov/
offices/hsg/sfh/hcc/hcs.cfm or call
1-800-569-4287.
Lenders, loan servicers and legitimate
housing counseling services generally
won’t charge a fee to help with a loan
modification. “But scam artists will
demand a large upfront fee, often
thousands of dollars, and they do very
little to actually help the homeowner,”
said Robert W. Mooney, FDIC Deputy
Director for Consumer Protection and
Community Affairs.
Also look at the new U.S. government
program for loan modifications and
refinancings (see Page 5). There is no
fee to get assistance or information
about this program from your
lender or a HUD-approved housing
counselor.
Make your mortgage payments
directly to your lender or the
mortgage servicer. “Some scam artists
claiming to offer foreclosure assistance
will give some reason why you should
send your mortgage payments to them
instead of the lender,” added Mooney.
“Soon your money — and the scam
artist — will be gone.”
Be especially suspicious of
unsolicited offers that arrive via
phone, e-mail or a knock on your
door. When in doubt, check out
a company with your local Better
Business Bureau or state consumer
protection office.
“Some companies have falsely
advertised or represented that they
are part of a government-endorsed
mortgage assistance network or they
are affiliated with a lender,” warned
Michael Benardo, manager of the
FDIC’s Financial Crimes Section.
Be particularly wary of any
organization that says it guarantees
foreclosure relief or that it has a
near-perfect success rate.
BUYER BEWARE
Read and understand any
documents before you sign them.
It may help to obtain advice from a
lawyer or trusted financial counselor.
“Be on guard against someone who
advises you against talking to your
lender directly or getting a second
opinion elsewhere,” added Benardo.
“Also be wary of anyone who promises
to pay off your mortgage or repair your
credit if you ‘temporarily’ sign over to
them the deed to your home, because
you may be permanently losing your
home to a thief.”
If you think you’re already caught
up in a scam, alert the proper
authorities. Good places to
start include the Federal Trade
Commission (1-877-FTC-HELP
or www.ftccomplaintassistant.gov)
and your state Attorney General
(www.naag.org/attorneys_general).
Also, consider contacting an attorney
to help you sort through options and
attempt to undo any damage.
Try to deal only with
lenders, businesses and other
organizations you already know
or that have been recommended.
If you think you’re already
caught up in a scam, alert the
proper authorities.
For more information, check out
www.fdic.gov/foreclosureprevention,
where you can find resources that
include a new FDIC brochure on
mortgage rescue scams. To order up
to five paper copies of that brochure,
call toll-free 1-877-ASK-FDIC (that’s
1-877-275-3342) and select the option
for FDIC publications. Also helpful is
a Federal Trade Commission consumer
fact sheet at www.ftc.gov/bcp/edu/
pubs/consumer/credit/cre42.shtm. Q
Foreclosure Rescue and Loan Modification Scammers
Still Prey on Stressed Homeowners: Our Latest Tips
As previously reported in FDIC
Consumer News, many homeowners
having difficulty making their monthly
mortgage payments are being targeted
by criminals who charge large upfront
fees and falsely “guarantee” to rescue a
home from foreclosure. In some of the
worst cases, homeowners have become
victims of identity theft or were tricked
into signing away their ownership
of a house. Because mortgage rescue
scams continue to be a big problem, we
offer our latest tips on how to protect
yourself.
Try to deal only with lenders,
businesses and other organizations
you already know or that have been
recommended. If you can’t pay your
mortgage, ask your lender or loan
servicer (the company that collects
payments and performs other work for
the lender) about options for avoiding
foreclosure that include lowering your
monthly payment by reducing the
interest rate, extending the term or
adjusting the loan balance.
You don’t need to pay a lot of
money for help or information.
If you think you need assistance
working with your lender, get help
from a trained, reputable housing
counselor who can help you for no
charge or a small fee. Find one through
groups such as NeighborWorks
America (www.nw.org) or by calling
1-888-995-HOPE (4673). Or, for a
referral to a local counseling agency
certified by the U.S. Department of
Housing and Urban Development
(HUD), visit www.hud.gov/
offices/hsg/sfh/hcc/hcs.cfm or call
1-800-569-4287.
Lenders, loan servicers and legitimate
housing counseling services generally
won’t charge a fee to help with a loan
modification. “But scam artists will
demand a large upfront fee, often
thousands of dollars, and they do very
little to actually help the homeowner,”
said Robert W. Mooney, FDIC Deputy
Director for Consumer Protection and
Community Affairs.
Also look at the new U.S. government
program for loan modifications and
refinancings (see Page 5). There is no
fee to get assistance or information
about this program from your
lender or a HUD-approved housing
counselor.
Make your mortgage payments
directly to your lender or the
mortgage servicer. “Some scam artists
claiming to offer foreclosure assistance
will give some reason why you should
send your mortgage payments to them
instead of the lender,” added Mooney.
“Soon your money — and the scam
artist — will be gone.”
Be especially suspicious of
unsolicited offers that arrive via
phone, e-mail or a knock on your
door. When in doubt, check out
a company with your local Better
Business Bureau or state consumer
protection office.
“Some companies have falsely
advertised or represented that they
are part of a government-endorsed
mortgage assistance network or they
are affiliated with a lender,” warned
Michael Benardo, manager of the
FDIC’s Financial Crimes Section.
Be particularly wary of any
organization that says it guarantees
foreclosure relief or that it has a
near-perfect success rate.
BUYER BEWARE
Read and understand any
documents before you sign them.
It may help to obtain advice from a
lawyer or trusted financial counselor.
“Be on guard against someone who
advises you against talking to your
lender directly or getting a second
opinion elsewhere,” added Benardo.
“Also be wary of anyone who promises
to pay off your mortgage or repair your
credit if you ‘temporarily’ sign over to
them the deed to your home, because
you may be permanently losing your
home to a thief.”
If you think you’re already caught
up in a scam, alert the proper
authorities. Good places to
start include the Federal Trade
Commission (1-877-FTC-HELP
or www.ftccomplaintassistant.gov)
and your state Attorney General
(www.naag.org/attorneys_general).
Also, consider contacting an attorney
to help you sort through options and
attempt to undo any damage.
Try to deal only with
lenders, businesses and other
organizations you already know
or that have been recommended.
If you think you’re already
caught up in a scam, alert the
proper authorities.
For more information, check out
www.fdic.gov/foreclosureprevention,
where you can find resources that
include a new FDIC brochure on
mortgage rescue scams. To order up
to five paper copies of that brochure,
call toll-free 1-877-ASK-FDIC (that’s
1-877-275-3342) and select the option
for FDIC publications. Also helpful is
a Federal Trade Commission consumer
fact sheet at www.ftc.gov/bcp/edu/
pubs/consumer/credit/cre42.shtm. Q