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Scam dupes homeowners into false loan audits

Many home owners are facing challenges that they’ve never faced before… and that makes them vulnerable. It’s a shame to watch your fellow man, or should I say criminal, pray on and take advantage of people when their guard is down and they’re crying for help. But that’s exactly what’s happening.

Here is the article related to the latest scam that’s came to light ==>

WASHINGTON – Sept. 29, 2011 – Some homeowners are tricked into a forensic loan audit – a new scam that targets struggling owners who hope a loan modification can save their home from foreclosure.

Several organizations popped up in the last two years. The usually link themselves to attorney and auditor organizations, and offer forensic loan audits. The Federal Trade Commission and Better Business Bureau say complaints about these “loan audit” companies have skyrocketed since the beginning of the year.

In the scam, the organizations say they’ll review a homeowner’s mortgage documents to determine whether the lender complied with state and federal lending laws. They then promise to get the homeowner a quick loan modification, and possibly a principal reduction, on their mortgage. Homeowners pay an upfront fee – usually about $3,000.

However, homeowners say that they aren’t getting a loan modification and usually nothing happens after the audit, even after loan document errors are discovered.

“They lure consumers to believe that by hiring them for a review of a loan modification package, they can expedite the process and get better results, or they make false promises that they can get a loan mod or principal reduction,” says Josh Fuhrman, FTC’s senior vice president of community affairs. “Homeowners are not typically getting any results. [Scammers] are just stringing [homeowners] along, or they disappear.”

Source: “Home Owners Beware: Forensic Loan Audit Scam,” AOL Real Estate (Sept. 26, 2011)

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Fed HARP Program Expanded, Helps More Owners

WASHINGTON – Oct. 24, 2011 – The Federal Housing Finance Agency (FHFA), with Fannie Mae and Freddie Mac, announced a series of changes to the Home Affordable Refinance Program (HARP). FHFA hopes to help more borrowers benefit from a program that refinances home mortgages.

“We know that there are many homeowners who are eligible to refinance under HARP, and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by (Fannie Mae and Freddie Mac). Our goal … is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”

HARP is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. The program is offered to borrowers whose loans were sold to Fannie Mae and Freddie Mac on or before May 31, 2009, with current loan-to-value (LTV) ratios above 80 percent.

New program enhancements change several aspects of HARP including:

• Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages, and lowering fees for other borrowers.

• Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.

• Waiving certain representations and warranties for lenders that make loans backed by Fannie Mae and Freddie Mac.

• Eliminating a new property appraisal if there is a reliable AVM (automated valuation model) estimate provided by Fannie Mae or Freddie Mac.

• Extending the end date for HARP until Dec. 31, 2013, for loans originally sold on or before May 31, 2009.

Mortgage lenders should have more information about the HARP program changes by Nov. 15, 2011. Since participation isn’t mandatory, implementation schedules will vary.

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

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