Loan Modification Scam Alert Press Conference June 11 2010

Missouri Attorney General Chris Koster and Illinois Attorney General Lisa Madigan joined St. Louis Fed Senior VP Julie Stackhouse and other regional officials at a news conference hosted by the St. Louis Fed to launch a campaign to help homeowners avoid loan modification scams. The campaign was part of a nationwide NeighborWorks America initiative to help homeowners protect themselves against loan modification scams, find trusted sources of help, and identify and report scam activity.

The mortgage crisis has left millions of homeowners facing foreclosure. These individuals are vulnerable to scams that may sound good but, in the end, worsen their situation, said Stackhouse. As noted previously by Chairman Bernanke, the Federal Reserve is committed to fully employing our authority, expertise and resources to help alleviate the distress of consumers and their communities. The Federal Reserve Bank of St. Louis stands strong in this commitment.

Following the news conference, groups of local volunteers hung bright yellow fliers on doorknobs in neighborhoods in St. Louis County, St. Charles County and St. Clair County, Ill. The fliers contained contact information for assistance, including how to use the United Ways free 2-1-1 help line to reach HUD-approved housing counselors in the area. The volunteers included a group of 20 or so Bank employees who distributed the fliers in a Belleville, Ill., neighborhood.

At the news conference, Koster said, In Missouri, we take a zero tolerance stance against foreclosure-relief and mortgage-modification scams that do nothing but make false promises to consumers. We will continue to investigate unscrupulous companies and use all means available to stop them from cheating Missouri consumers.

Madigan added, Helping homeowners stay in their homes is a top priority of my office. I urge homeowners not to be deceived by scam artists who take upfront fees on the false promise that they will work with your lender to save your home.

Other speakers included C. Steven Baker, Midwest region director of the Federal Trade Commission (FTC); Leon Gray of NeighborWorks America; and Rich Ryffel, president of the board of directors of Beyond Housing.

Click on the links below to watch the rest of the session:

For more information or to report a scam, visit www.loanscamalert.org and view the six red flags to look for in a scam, or call the United Way's 2-1-1 line, the Missouri Attorney General Consumer Protection Hotline (1-800-392-8222), the Illinois Attorney General Homeowner Helpline (1-866-544-7151) or the FTC scam hotline (1-877-FTC-HELP).

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