News Release

March 15, 2010

Contacts:
Eileen Anderson, (516) 330-2439, eanderson@cdcli.org

New Campaign Empowers Long Island Homeowners
to Combat Loan Modification Scams in 2010
A network of local, state and national partners offers new resources for at-risk homeowners to
recognize scams, report them and find legitimate help

Long Island, NY – NeighborWorks America today launched the national “Loan Modification Scam Alert Campaign” on Long Island to provide residents facing the possibility of foreclosure with vital information to guard against loan modification scams, find trusted help and report illegal activity to authorities. NeighborWorks Director of National Initiatives and Applied Research Nelson Merced was joined for the announcement by Community Development Corporation of Long Island President and Chief Executive Officer Marianne Garvin, New York State Banking Department Director of Non-Depository Institutions and Consumer Protection Jane Azia, Superintendent of Banks for New York State Richard H. Neiman, New York State Consumer Protection Board Director of Communications and Policy Research Gary Brown, and other local officials.

The national foreclosure rate has reached an all-time high of 8.85 percent, and millions more foreclosures are expected in coming years. Locally, the rate is near 7.78 percent. “Too many residents on Long Island are losing thousands of dollars and their homes to scam artists who make big promises and then do little or nothing to help them save their homes,” said Nelson Merced, Director of National Initiatives and Applied Research of NeighborWorks America. “Anyone can be a victim and the people of Long Island 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.”

(l-r): Gary Brown, New York State Consumer Protection Board director of Communications and Policy Research; Nelson Merced, director of National Initiatives and Applied Research, NeighborWorks America; Pamela Bellospirito, Long Island homeowner; Marianne Garvin, president and CEO, CDC of Long Island; Jane Azia, New York State Banking Department director of Non-Depository Institutions and Consumer Protection. View more photos»

Together, campaign partners aim to reach thousands of distressed homeowners in hundreds of communities at high risk for fraud activity. The campaign targets all audiences, but its resources are focused sharpest on those groups that have already seen high levels of scam activity, including seniors, Hispanics, African Americans and Asian Americans. 

Long Island residents facing foreclosure can call (631) 471-1215 ext. 158 to schedule free counseling sessions with the Community Development Corporation of Long Island or to report a scam. Nationally, information, resources and reporting capabilities are now available around the clock at www.LoanScamAlert.org and by calling 1-888-995-HOPE (4673). Community groups on Long Island may also visit the Web site to access campaign materials available for download and distribution locally.  

The campaign uses real-life scam stories, collateral materials, print advertising, local radio PSAs, events, word of mouth and social media activity to draw special attention to the warning signs of a loan modification scam. “Borrowers must avoid any individual or firm that asks for a fee in advance, guarantees a loan modification or tells you to pay them instead of paying the mortgage.Only a lender can guarantee a loan modification and they do not charge,” said Marianne Garvin, President & CEO, Community Development Corporation of Long Island. 

“The current economic climate has provided fertile ground for con artists who seek to take advantage of desperate and distressed homeowners,” said Mindy A. Bockstein, chairperson and executive director of the New York State Consumer Protection Board. “That’s why we’re alerting New Yorkers to the dangers of loan modification scams and warning about the red flags and aggressive tactics that may indicate suspicious activities. We urge people to access free foreclosure counseling services instead of going to a for-pay company which may actually accelerate foreclosure by making big promises but doing little or no work, redirecting mortgage payments or taking title to your home.”

"Preventing unnecessary foreclosures due to predatory lending and mortgage fraud is a top priority for the Governor and the Banking Department," said Richard H. Neiman, Superintendent of Banks for New York State. "Unfortunately, with every crisis you have unscrupulous individuals who are looking for ways to take advantage, as we have seen with these scams. While the Governor's office has taken strong, preemptive steps to reduce fraud by banning up-front fees on modifications, we believe that reaching out and educating New York consumers about these dangers is an important and necessary step."

Homeowners are also urged to report scam activity at once to the proper authorities through the campaign Web site and hotline. “We want to stress how crucial it is for people to learn the signs of a scam and quickly report any encounter that just doesn’t ring true,” said Yolanda McGill of the Lawyer’s Committee for Civil Rights Under Law, the organization that is heading the enforcement arm of this campaign and has created a database of loan modification scam complaints from across the nation.  “Scammers are out there trying to take advantage of people in a tough spot.  The campaign is making it easier for homeowners in distress to fight back and help us shut scam artists down.  Homeowners wishing to report a suspected scam operation may fill out a complaint form online by going to www.preventloanscams.org or www.LoanScamAlert.org and selecting ’How to Report Scams’.”

“Our campaign is based on the belief that knowledge is the best defense, which is why we’re equipping homeowners with the tools they need to minimize their risk and stop scammers in their tracks,” said Merced of NeighborWorks.

NeighborWorks America is coordinating the “Loan Modification Scam Alert” campaign nationwide through its 235 community-based affiliates and other local, state and national partner organizations, including the Department of Housing and Urban Development (HUD), the Federal Trade Commission, the U.S. Department of the Treasury, Fannie Mae, Freddie Mac and the Lawyers’ Committee for Civil Rights Under Law. For more information about the campaign, visit www.LoanScamAlert.org. 

About NeighborWorks America

NeighborWorks America creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. Since 1991, we have assisted nearly 1.2 million low- to moderate-income families with their housing needs. Much of our success is achieved through our support of the NeighborWorks network ― more than 235 community development organizations working in more than 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. In the last five years, NeighborWorks organizations have generated more than $15 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.