In a continuing effort by federal regulatory
agencies to be more consumer pre active, the Federal Reserve issued a series of
guidelines and suggestions on how mortgage holders could protect themselves
from foreclosure scams. In a press
release issued yesterday the Fed continued its efforts to address the American
public directly on matters affecting their financial health. The text of the release follows:
***
Reports
of mortgage foreclosure scams are on the rise. Knowing what to watch for
and where to turn for help is vital for families who are struggling to remain
in their homes. March 1 to 9 is National Consumer Protection Week, and
the Federal Reserve Board has compiled some tips to help protect consumers from
becoming victims of foreclosure avoidance scams. It's important for
consumers to know that housing counselors and other resources are available at
no or low cost to assist homeowners who have fallen behind on their mortgage
payments.
"Saving
a home from foreclosure requires fast and informed action but the solution
doesn't have to be costly," said Federal Reserve Governor Elizabeth A
Duke. "It shouldn't hurt to get help."
Solicitors
of foreclosure schemes reach out to potential victims by a variety of means
using the Internet, the telephone, and direct mailings. Some solicitors
go door-to-door or approach homeowners at events related to home
preservation. The information the Federal Reserve is providing, which is
part of its "5 Tips" series, is intended to give consumers the basic
information they need to recognize and avoid foreclosure avoidance scams.
Consumers are urged to check the credentials of counselors and to avoid working
with someone who collects a fee before providing any services or accepts
payment only by cashier's check or wire transfer. Consumers should not
pay for a service without knowing exactly what they are buying.
Avoiding
foreclosure cannot be guaranteed--regardless of the circumstances.
Working with a legitimate counselor can increase the chances of keeping a home,
but consumers should be wary of people who tell them it's a sure thing.
Details of the transaction, along with any promises, should be provided up
front and in writing.
The tips
to follow will help consumers select a reputable counselor and avoid fraudulent
foreclosure scams.
·
Work only with a
non-profit HUD-approved counselor. For a list of certified counselors
visit www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
or call 877-HUD-1515 (877-483-1515). If the name of the organization you
are working with isn't on the list, then switch to one that is.
·
Don't pay an arm and a
leg. Most housing counselors provide no- or low-cost counseling
services. You should not have to pay hundreds, or thousands, of dollars
for assistance.
·
Be wary of
"guarantees." No one can ensure you good results.
·
Know what you are
signing. Don't let a counselor pressure you into signing paperwork you haven't
had a chance to read thoroughly or that you don't understand.
·
If it sounds too good
to be true, it probably is.
·
If you feel you are a
victim of foreclosure fraud, trust your instincts and ask for help. Report
suspicious schemes to your state and local consumer protection agencies, which
you can find on the Consumer Action
Website.
***
March 1
to 9 being National Consumer Protection Week, the Federal Reserve’s release
serves as a companion piece to the FDIC’s issuance of a
series of “Money Management Tools” for consumers, the announcement of
which was reported yesterday.
The web
sites of both organizations contain a variety of useful consumer information
and seem to be departing from their usual industry focus recognizing that the
heart of the economic crisis has been the financial sectors predatory consumer
focus.