A partnership of local, state and national government agencies, nonprofit organizations and financial institutions launched a new national public education campaign to help homeowners protect themselves against loan modification scams.
The new initiative, called the Loan Modification Scam Alert, will be led by NeighborWorks, a national nonprofit organization created by Congress. The campaign is designed to educate the public about the warning signs of a loan modification scam through print advertizing, local radio public services announcements, events, word of mouth and social media activity. Campaign organizers will also encourage homeowners to report scam activity to authorities via a website and telephone hotline.
"This campaign is based on the belief that knowledge is the best defense, which is why the campaign equips homeowners with the tools they need to minimize their risk and stop scammers in their tracks," said Neighborworks America chief operating officer Eileen Fitzgerald.
Organizers say the campaign will target all audiences, but that its resources will be focused on groups that have already seen high levels of scam activity, including seniors, Hispanics, blacks and Asians.
The campaign kicked off at a recent event in Los Angeles that included speeches by Fitzgerald and Los Angeles mayor Antonio Villaraigosa. Los Angeles has the highest number of home foreclosures of any American city.
"Anyone can be a victim and the people of Los Angeles need to know what resources are available to them. They need to know that legal aid groups, financial institutions, and HUD-certified counselors are offering free services to anyone seeking help," Villaraigosa said.
The risk of mortgage modification scams may increase as home foreclosures continue to rise. Foreclosures hit a record high of 937,840 in the third quarter of 2009 according to RealtyTrack, up 5 percent from the second quarter of 2009 and 23 percent from the third quarter of 2008.