NeighborWorks America Predatory Lending Information
Predatory lending has, unfortunately, become a growth industry in recent years. In today's environment, it is more imporatant than ever to look out for unscrupulous contractors and lenders, not only when refinancing your home, but when making home improvements as well. At NeighborWorks America, we have information on:
- The Evolution of Predatory Lending
- Common Predatory Lending Practices
- How to Spot Predatory Lending
- You should also contact your local NeighborWorks organization or other nonprofit financial counselor for guidance.
Foreclosure Rescue Scams
Download NeighborWorks America's Tips to Avoid Being Scammed [PDF]. See also Spanish, Korean and Chinese versions.
Top Three Foreclosure Scams To Avoid
Unfortunately scammers have no problem taking advantage of homeowners who are facing foreclosure. The Federal Trade Commission lists the top three foreclosure scams to be aware of as the housing crisis deepens.
- The foreclosure prevention specialist: The “specialist” really is a phony counselor who charges outrageous fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions results in saving the home. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.
- The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the “rescuer” walks off with most or all of the equity.
- The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.
- See also FTC Information on: Foreclosure Rescue Scams: Another Potential Stress for Homeowners
News Articles and Tips
- A Crack Down on Rescue Schemes
- Mortgage Fraud at an All-Time High
- News Release: Federal Reserve Bank Has Compiled Some Tips to Help Protect Consumers From Foreclosure Scams
- Press Release: NeighborWorks America Works to Thwart Foreclosure Rescue Scams; Offers Tips to Avoid Being Scammed
- Swindlers Find Growing Market in Foreclosures
- Don't Become a Victim of These Mortgage Scams
- Consumer Watch - Foreclosure Scams
- Loan Modifications a Tricky Thicket for Those Seeking Homeowner Help
More Predatory Lending Resources
FDIC:
Federal Reserve Board
- Consumer Alert — Bankruptcy Mortgage Foreclosure Scams
U.S. Department of Justice:
U.S. Department of Treasury, Office of the Comptroller of Currency
U.S. Department of Housing and Urban Development