Foreclosure affects thousands of people every day, and scammers are cropping up to take advantage of them by charging homeowners money for financial counseling services that nonprofit agencies offer for free, housing experts said Tuesday.
To prevent foreclosure scams, Chattanooga Neighborhood Enterprise, representatives from Fannie Mae, the Lawyer’s Committee of Civil Rights and the U.S. Department of Housing Development announced Tuesday an online database aimed at documenting information about the scams when they do occur.
“We are here today to unveil a website that will allow us to bring attention to the scammers who are seeking to take advantage of people who are going into foreclosure,” said Blane Andrews, CNE’s senior homeownership specialist.
The national loan modification scam database records 778 complaints for August 2010, according to the Lawyer’s Committee for Civil Rights. The site also shows that homeowners lost more than $14 million to scams that month.
Homeowners have filed 37 scam complaints in Tennessee this year, CNE officials said. Andrews said more complaints will be filed after people learn of the site.
“I know you’re in a desperate spot and you believe that this nice person is here to help you, but they may not be,” said Ralph Perrey, Fannie Mae’s senior business developer.
The website will allow homeowners to file complaints exposing scam perpetrators. Homeowners can see if other complaints against the same company have been filed. Government agencies will also use the database to detect patterns of scam activities.
The Lawyer’s Committee for Civil Rights Under Law developed and starting maintaining the site earlier this year.
CNE officials said they have counseled clients who have been approached by scam perpetrators, but most of them have not been victims.