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Have You Heard

Thursday, January 1, 2009

Scam Offers Consumers Loans from the Fed

Consumers need to be aware that solicitations promising personal loans through a Federal Reserve lending program are a hoax.

Targeted consumers are told they can work with a broker to receive a sizable, secured loan from the Fed. However, the consumer must first deposit large sums of money in a bank account as a security deposit.

The Federal Reserve has no involvement in these solicitations and does not directly sponsor consumer lending programs.

Consumers with questions about solicitations they suspect may be fraudulent should contact the Federal Reserve Board Consumer Help Center at 1-888-851-1920 or at

Fed Adjusts Dollar Amount Of Fee-Based Trigger

Effective Jan. 1, 2009, home mortgage loan fees of $583 or more will trigger additional disclosure requirements under the Truth in Lending Act. This adjustment in the dollar amount of the fees is based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2008.

The adjustment does not affect new rules adopted by the Federal Reserve Board in July 2008 for “higher-priced mortgage loans.” Coverage of mortgage loans under the July 2008 rules is determined using a different rate-based trigger.

The Home Ownership and Equity Protection Act of 1994 restricts credit terms, such as balloon payments, and requires additional disclosures when total points and fees exceed the fee-based trigger or 8 percent of the total loan, whichever is larger.