Administration Cracks Down on Foreclosure Schemes

By Caitlin Taylor

Apr 6, 2009 8:17am

ABC News’ Matthew Jaffe reports: In recent months, the Obama administration has taken steps to stem the tide of home foreclosures, unveiling a $275 billion plan to address the housing crisis, but now officials must also find a way to stop foreclosure schemes that prey on struggling homeowners. Today the administration will launch a multi-agency crack down on these schemes, with Treasury Secretary Tim Geithner, Attorney General Eric Holder, and Housing & Urban Development Secretary Shaun Donovan announcing new measures at a Monday press conference in Washington. According to an administration official, they will "announce new initiatives to coordinate information and resources across agencies to maximize targeting and efficiency in fraud investigations, alert financial institutions to emerging schemes, step up enforcement actions and educate consumers to help those in financial trouble avoid becoming the victims of a loan modification or foreclosure rescue scam." Joining Geithner, Holder, and Donovan at the announcement will be Federal Trade Commission Chairman Jon Leibowitz and Illinois Attorney General Lisa Madigan. The new measures come on the heels of the administration’s Making Home Affordable program, which allows servicers to help homeowners by modifying loans and refinancing. The steps are the latest in the government’s increasing efforts to stop foreclosure rescue scams and loan modification fraud. Today, the official told ABC News, at least 22 states are aggressively pursuing fraudulent foreclosure rescue firms. This week the Federal Reserve will launch an unprecedented ad campaign in movie theaters to warn consumers about these scams. The aids are designed to let people know that the Fed provides free information about foreclosure fraud. The 30-second spot states, "Having trouble keeping up with your mortgage payments? Are you facing foreclosure? Before you do anything, you need to get information on how to avoid foreclosure scams. Don’t get taken advantage of. It shouldn’t hurt to get help. Go to and click on ‘Five Tips For Avoiding Foreclosure Scams’. Learn how to protect your home and avoid foreclosure fraud.  It’s information you can trust from the Federal Reserve. Go to and click on ‘Five Tips For Avoiding Foreclosure Scams’." The ads will run in a total of 14 cities in the seven states hit hardest by foreclosures: California, Nevada, Florida, Arizona, Ohio, Michigan, and Georgia. In all, the ads will air in 28 theaters, hopefully reaching the homeowners who need it the most. — Matthew Jaffe

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