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Loan Modification Scam Alert
December 4, 2009 by Jennifer Brandt
Filed under Violence Reduction
6 Things you Should Know
Scams aren’t always easy to spot – but it helps if you know the warning signs to look for. Here are six red 
flags to indicate that you may be dealing with a loan modification scammer:
1A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage. They may pocket your money and do little or nothing to help you save your home from foreclosure.
2A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.
3A company/person advises you to stop paying your mortgage company and pay them instead. Despite what a scammer will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.
4A company pressures you to sign paperwork that you haven’t had a chance to read, and you don’t fully understand. A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.
5A company claims to offer “government-approved” or “official government” loan modifications. They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. And, remember, you do not have to pay to benefit from government-backed loan modification programs.
6A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.
Visit the webpage http://www.loanscamalert.org/default.aspx for more information on how to spot and report loan modification scams.
Hispanics targeted by Fraudulent Companies
April 16, 2009 by Jennifer Brandt
Filed under Civic Participation, Education
Rosario Méndez, Hispanic outreach coordinator for the Federal Trade Commission’s Bureau of Consumer Protection in Washington, D.C., said that a study by the FTC found that Hispanic consumers are twice as likely to be victims of fraud as non-Hispanic whites. And a new one-day survey of news media found hundreds of advertisements targeted to Hispanics that potentially could violate federal and state laws.
“ We’re looking for new opportunities to educate Latinos before they become victims,” Attorney General Rob McKenna said, “We recognize the advantage of coordinating with partners across all sectors, public, private and nonprofit, to be more effective. It’s a big job and a significant challenge, but together we can make a difference.”
Latinos may fall victim to fraud more often because of:
- Unfamiliarity with contracts, credit and banking systems in the United States;
- Limited literacy and linguistic barriers;
- Lack of knowledge of available services; and
- Reluctance to trust government agencies.
According to the study three out of the top four categories of fraud are related to credit. Consumers with high levels of debt are more likely to be victims of fraud, because they buy into credit repair scams.
Two resources that we trust here at Acceso Hispano to help clients fix their credit and help prevent foreclosure on their homes are:
Acorn Housinghotline 888-409-3557
and The National Foundation for Credit Counseling
English hotline 1-800-388-2227 Spanish Hotline 1-800-682-9832
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Source: Msnbc.msn.com
Resources for Latino Families Affected by Foreclosure
February 2, 2009 by Elizabeth Beachy
Filed under Civic Participation
Shortly before the foreclosure crisis, Latinos were accumulating wealth primarily through home ownership. Between 1996 and 2006, Latino expenditures on mortgage interest and charges had increased by 216%, bringing Hispanics and Non-Hispanics close to financial parity.
When the foreclosure crisis hit, it hit Latino communities harder.
According to the Center for Responsible Lending, in 2004 Latinos were between 29% and 142% more likely than Whites to receive a higher-rate loan. Predatory lenders advertising in Spanish then capitalized on language barriers in complex negotiation processes, and as ACORN reports, steered one- third to one-half of subprime borrowers to higher cost loans, despite the availability of better loan options.
Predatory lenders held a larger share of the mortgage market in predominantly African-American and Latino neighborhoods than in non-minority neighborhoods. A collaborative study released by the Woodstock Institute showed that high-risk lenders held 18.8% of the market share in neighborhoods that were comprised of over 80% minority population and only 5.3% in neighborhoods where minorities were less than 10% of the population.
These practices led to the foreclosure crisis and translate into Latino borrowers losing between $76 billion and $98 billion on mortgages made between 2000 and 2008 according to United for a Fair Economy. Alongside these losses, ACORN predicts an additional $32 billion lost due to falling property values. This is devastating to the financial well-being of the Latino community.
The rental market has also been affected by the foreclosures, leaving many renters evicted on short notice. This, in turn, increases rates of Latinos living in overcrowded conditions, the secondary symptoms of which include: homelessness, dependence on public services, and neighborhood conflict.
To read more about how the foreclosure crisis is affecting Latino communities, visit the Latinos United website or read their publication on Latinos and foreclosure.
Resources for Families Facing Foreclosure
A number of resources exist to help families facing foreclosure navigate the complex mortage systems and legislation. The LSC Resource Information site offers a series of foreclosure resources to help legal aid services address issues related to home ownership; renter issues; building a home foreclosure mitigation project and others. It also includes community legal education resources, pro-bono projects, and other resources that service providers can refer clients to. Visit LRI’s Foreclosure Resources page for these and other resources.
The Federal Reserve Bank of San Francisco offers several tools for service providers seeking to mitigate the impact of home foreclosures, including a four-step toolkit.
An excellent resource for families who are thinking about purchasing a home, is Freddie Mac’s “Don’t Borrow Trouble” website which offers tips to help families avoid predatory lending practices.
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