MORTGAGE FRAUD CRACKDOWN

The White House has announced a multi-agency effort to crack down on mortgage loan modification fraud and foreclosure rescue scams. A joint effort by the Treasury Department, US Department of Justice, Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and various State Attorneys General will coordinate information and resources, produce programs to educate the public and, most importantly, step up enforcement actions.

In a press conference to announce the plan, Treasury Secretary Timothy Geithner warned that fraud being perpetrated against people struggling to stay in their homes has skyrocketed.

US Attorney General Eric Holder added the FBI has targeted 2,100 companies suspected of defrauding troubled homeowners with "rescue scams." That puts mortgage fraud up 400% from the Bureau's caseload five years ago.

Holder cited two examples of these scams:

*** A Kansas company collected fees up front from homeowners, promising to keep their homes out of foreclosure. The company also filed fraudulent Chapter 11 cases on the homeowners' behalf.

*** And in Brooklyn, NY, some unscrupulous businessmen set up straw buyers to purchase homes with the false promise that the original owners would get them back when the mortgages were restructured.

Other companies have been using false names, such as The Federal Loan Modification Company, to trick distressed homeowners into thinking that they are somehow involved with the government.

For members of the public seeking help, there's a new website:

MakingHomeAffordable.gov

It offers information on the administration's effort to help homeowners out of mortgage trouble, and includes a listing of HUD-approved mortgage counselors. There is also3 this freephone number --- (888) 995-HOPE --- for anyone who suspects a company is perpetrating a scam.