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CPB warns of foreclosure scams

With the national foreclosure rate at an all-time high, the New York State Consumer Protection Board (CPB) is relaying an urgent message to New Yorkers: Be wary of financing scams!

On Thursday, March 4, the CPB marked 2010 Consumer Action Day – the state’s kick-off event for National Consumer Protection Week – by warning of the dangers of loan modification or foreclosure “rescue” companies.

CPB executive director Mindy Bockstein said the statewide foreclosure rate of close to eight percent is “fertile ground for con artists.”

In fact, the CPB cited a report by the Financial Crimes Enforcement Network, which said depository institutions submitted more than 15,000 mortgage loan fraud claims in the third quarter of 2009 – a 7.5 percent increase from the previous year.

With New York state coming in third on the list, the CPB felt it was time to act.

“If you’re having difficulty meeting your mortgage obligations and are facing foreclosure, be mindful of the red flags and aggressive tactics that may indicate suspicious activities,” Bockstein advised consumers in a statement.

The CPB campaign urges New Yorkers to access free foreclosure counseling services instead of for-pay assistance and avoid any service that requests a fee in advance and guarantees it can halt the foreclosure process or modify a loan. Only lenders can adjust loans, the campaign emphasizes.

“This effort is about keeping New Yorkers in their homes and protecting them during this economic crisis,” Governor David Paterson said in a statement. The Governor said the scam awareness campaign builds on last year’s foreclosure legislation, which ushered in an area of new protections for homeowners and tenants in the midst of the mounting foreclosure crisis.

Those confronted with foreclosure can find a free housing counselor at www.dhcr.state.ny.us, the website of the state Division of Housing and Community Renewal.

For more information on the CPB’s anti-scam program or to report a problem, New Yorkers should visit www.loanscamalert.org or call 888-995-HOPE.

 

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