Task Force Established to Combat HAMP Scams

By: Jann Swanson •

Creation of a multi-agency task force was announced on Thursday designed specifically to deter scam artists preying on homeowners looking for help under the Home Affordable Modification Program (HAMP).  The task force will operate under the auspices of the Department of the Treasury, the new Consumer Financial Protection Bureau (CFBP) and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP.) 

SIGTARP, the CFPB, and Treasury will investigate mortgage modification schemes, among other things, in which companies charge struggling homeowners a fee in exchange for false promises of lowering the homeowner's mortgage debt or payments through HAMP.

Simultaneous with the announcement of its creation, the task force issued a consumer fraud alert to protect homeowners from HAMP-related mortgage modification scams.  The alert tells homeowners who are struggling to make their mortgage payments to be aware of con artists that promise to save their homes and lower their mortgage debt or their payments and offers these homeowners specific tips:

  • No special assistance is needed to apply for a HAMP modification and paying a third party does not improve your likelihood of obtaining one. Beware of persons claiming to be HAMP experts. Homeowners can make application on their own or with the help of a Housing and Urban Development (HUD) approved housing counselor. Applying for the program is always free.
  • No third party can approve a modification; this can only be done by the loan servicer.
  • No advance fee is necessary for mortgage modification services and in most cases charging in advance for a modification is illegal.
  • Homeowners should verify the authenticity of any individual or company that claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government by calling the Homeowner's HOPETM Hotline.
  • Beware of individuals or companies that offer money-back guarantees or that advise stopping mortgage payments or not contacting the mortgage servicer.

The alert stresses that troubled homeowners can avoid scams by working with a HUD-approved housing counselor to understand their options and provides information for contacting both HAMP and an approved counselor.

 "The goal of our consumer fraud alert is to empower homeowners with the knowledge of how to recognize and avoid these scams," said Christy Romero, Deputy Special Inspector General for SIGTARP.  "These scams prey upon the most vulnerable homeowners as they desperately hold out hope of saving their homes.  SIGTARP, the CFPB, and Treasury want to make sure that homeowners know a scam when they see one and know where to turn for help.  SIGTARP will work with the CFPB and Treasury in this joint task force and with other law enforcement partners to shut down these scams and to ensure that the perpetrators pay for their crimes."