This post is also available in: Spanish
Our guest blogger today is Joel Ibanez, HUD’s Office of Housing
When it comes to homeownership, you better watch your back.
That’s more or less what HUD has begun telling people in Chicago, Los Angeles, and Miami as part of a new campaign against loan modification scams called “Know It. Avoid It. Report It.”
These three cities have been hit hard by the housing crisis and now face some of the top numbers of loan modification scams in the nation. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) tracks suspicious activity reports (SARs) that indicate possible mortgage loan fraud.
During the last quarter of 2010, Los Angeles residents filed more SARs than any of the 50 other most-populous Metropolitan Statistical Areas. Chicago came in third and Miami fourth. This finding is consistent with statistics gathered throughout 2010, which showed California and Florida with the most reports and Illinois with the fourth highest.
In each of these cities, scammers are targeting similar types of low-income homeowners—elderly, Hispanics, and African Americans, and in Chicago, the Polish community.
These populations include people who do not speak English well and who have low levels of education. Without the ability to read and fully understand English-based information for themselves, people in these communities rely heavily on other people to advise them on financial matters. They also are less likely to be able to identify suspicious emails and ads. Trust in community members is often especially high among certain ethnic populations, as is fear of authorities.
These factors create a perfect environment for scammers. They can pose as caring, helpful professionals and steal money and homes from the unsuspecting.
As this campaign unfolds, HUD will be reaching out to these communities through multilingual brochures, posters, and flyers as well as ads on TV and radio, on mass transit and outdoors, and in publications. A special Web page has been set up at www.hud.gov/preventloanscams, plus a hotline number to report scams, 1-888-995-HOPE (4673).
Please help us to spread news of this campaign—that when it comes to home loan modification fraud, it’s best to do this: “Know It. Avoid It. Report It.”