Hud Works to Stop Loan Scams

On Friday, Apr. 28, the U.S. Department of Housing and Urban Development (HUD) held a press conference launching a new program to address homeowner scams entitled, "Know it. Avoid It. Report It." This is a part of a new campaign starting in Los Angeles as well as Chicago and Miami. Representatives of organizations who came together to address this growing issue attended the conference.

The speakers included Lori Gay, President and CEO of Los Angeles Neighborhood Housing services; Yolanda McGill of Lawyers' Committee for Civil Rights Under Law; Joel Ibanez, HUD National Office; and Ray Brewer, Field Office Director, HUD Los Angeles.

As many people deal with foreclosures and mortgage payments, looking for lower payments can lead to loan modification scam artists.The most vulnerable of these scams has been minority groups and the elderly.

Based on information from the National Loan Modification Scam database, as of April this year, African-Americans account for 8.6% of the complaints of scams out of 2,682 complaints in California. By the end on April, the Loan Modification Scam Prevention Network reported that California homeowners, in total, lost $9,523,238.58.

HUD has launched this new campaign to stop the growing scandal that is affecting people throughout the U.S., many of whom reside in Los Angeles. Homeowners are being led into faulty agreements, paying fees, and other fraudulent acts.

HUD is working to inform and prepare homeowners to recognize when they come across questionable ads and agents. Some of the rules HUD want people to follow include: noticing red flags, awareness of hotlines and complaint forms, finding HUD resource centers, and information on possible scam artists and practitioners.

"Know It. Avoid It. Report It." is a timely program that couldn't have come at a better time. HUD recognizes that these tough times, unfortunately, bring out "wolves in sheep's clothing." Together with people across the nation, they're working to stop the scam before it begins.

HUD invites consumers to visit its site for more information at www.hud.gov/preventloanscams.

HUD's mission is to create strong, sustainable, inclusive communities, and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business.