Fraudulent Loan Mod Ads Shut Down
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- Kara Johnson | November 22, 2011
More than 100 loan modification scams that targeted financially distressed homeowners through online advertisements have been shut down over the past week at the request of federal investigators.
The scams involved companies that the government says falsely promised to help homeowners obtain loan modifications through the Home Affordable Modification Program (HAMP) in return for a fee charged up front.
The Office of the Special Investigator General for the Troubled Asset Relief Program (SIGTARP) announced that it has shut down 125 such operations that advertise through Google, Yahoo! and Bing. The HAMP loan modification program is part of the Troubled Asset Relief Program (TARP).
Used Web banners, online search advertising
“Many homeowners who have fallen prey to these scams were enticed by Web banner ads and online search advertisements that promised, for a fee, to help lower mortgage payments,” said Christy Romero, Deputy Special Inspector General for SIGTARP. “SIGTARP's work in cutting off these Internet advertisements will immediately and dramatically decrease the scope and scale of these scams by limiting their ability to seek out and victimize struggling homeowners.”
The Internet is the first place that many homeowners turn to when seeking help in lowering their mortgage payments, Romero said, and perpetrators of mortgage frauds take advantage of that by targeting them through Web-based ads. She said such ads offer homeowners a false sense of hope and can even end up costing them their homes.
Google has cut off relationships with more than 500 advertisers and agents associated with alleged online mortgage fraud schemes and deceptive advertising, according to SIGTARP, while Microsoft has suspended relationships with more than 400 and ended all advertising all 125 alleged scams. Microsoft owns Bing and provides the technology used in Yahoo! Search.
Scammers took mortgage payments, property deeds
According to SIGTARP, the most frequently used scams involved charging an up-front fee for assistance in obtaining a HAMP loan modification. Homeowners were then told to stop making mortgage payments and cease communicating with their mortgage servicer, and deal only with the purported loan modification service instead.
In many cases, the scammers were able to collect homeowners’ mortgage payments for themselves, obtain sensitive personal information and even transfer property deeds to themselves. Scammers’ Web sites sometimes used government logos or official-sounding names to make it appear they were affiliated with the U.S. government.
SIGTARP did not indicate whether any criminal charges have been filed at this time. The Web sites in question were shut down through voluntary action by the three search engine companies on whose sites the advertising appeared. The investigation is ongoing.
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