It's a distinction that doesn't portray the mortgage business in a very good light. But it's a milestone nonetheless: The national Loan Modification Scam Database has now collected more than 20,000 complaints.
Worse, perhaps, is that the scam prevention network, which is operated by the Lawyers' Committee for Civil Rights Under Law, didn't start collecting complaints from consumers, housing counselors and other advocates until March 2010.
The 20,000 complaint reports represent more than $53 million lost to foreclosure rescue fraud, according to the Lawyers' Committee. And the group believes they represent only a small fraction of the harm caused to distressed homeowners by foreclosure rescue scams.
If there is a positive point to this story, it's that the information-sharing facilitated by the network is crucial to exposing shadowy operations that are stealing the homes of distressed owners who are facing foreclosure. The broad coalition behind the network includes dozens of local, state and federal agencies that all play a part in collecting the scam details from affected homeowners and using that information to educate the public, and to investigate and pursue civil and criminal actions against crooks.
“The database has become a central source of information for housing counselors, Treasury and the Office of the Special Inspector General for the Troubled Asset Relief Program, our pro bono law firm partners and others fighting foreclosure rescue fraud,” said Joe Rich, fair housing and fair lending project director for the Lawyers' Committee. “It is the courage of the thousands who reported scams, and the dedication of the network partners who are using this information to stop scammers and to prevent scams in the first instance, that make this 20,000 scam reports milestone so significant.”
The mortgage scam prevention network is a public-private collaboration of local, state and federal housing and consumer advocates and law enforcement agencies. It is supported by the Department of Housing and Urban Development, the Open Society Foundation, Fannie Mae, Freddie Mac, J.P. Morgan Chase, Bank of America and Citibank.
The Lawyers' Committee, a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination. Its principal mission is to secure, through the rule of law, equal justice under law, particularly in the areas of fair housing and fair lending, community development, employment discrimination, voting, education and environmental justice.
Looking ahead, the network will continue to attack fraud perpetrated against distressed homeowners through public education and prosecutions. And the Lawyers' Committee plans to publish more legal cases and research papers based on information from the Database.
Homeowners, reputable mortgage professionals and concerned citizens who witness scam activity or think they have been scammed are encouraged to report that information to the network. To report a loan modification scam or other type of foreclosure rescue scam, go to
