June 29, 2009 -- When the government is handing out help, there are always crooks who try to help themselves. They either claim to be connected to the government or they charge money for something you can get for free from the government.
There are two examples right now that I want you to be aware of.
Misleading Cash for Clunkers Sites
I told you last week about the Cash for Clunkers bill that Congress has approved. It provides credits of $3,500 to $4,500 to people who turn in older vehicles and buy more fuel-efficient ones. See more details on Cash for Clunkers in last week's column.
As soon as the Senate gave it a "yes" vote, Web sites popped up trying to take advantage. Many use the words "Cash for Clunkers" in their names and claim to be the go-to spot for information on how to get the government's money for your old car. Of course, there's always a catch, and some of these Web sites appear to be asking for personal information.
The National Highway Traffic Safety Administration (NHTSA) says there is only one official government source of information about the program, and that is www.cars.gov.
Loan Modification Schemes
As you know, the federal government has two programs in place to help homeowners who are struggling with their house payments. One is called the Home Affordable Refinance Program and helps homeowners refinance into a more affordable mortgage. The other is the Home Affordable Modification Program, which helps homeowners work with their existing lender to lower their monthly payments.
Unfortunately, private businesses have been setting up Web sites and sending e-mails that make it look like they are connected to these plans and advertise that they can save your home from foreclosure. The Federal Trade Commission filed a complaint against a company that called itself "Federal Loan Modification Center."
Businesses Mimic Government Mortgage Programs
The FTC says the defendants misrepresented that they were affiliated with the government and charged a large fee in advance while promising to modify people's mortgages or stop foreclosures.
A colleague of mine received an e-mail with the subject line "Obama's Mortgage Plan: Stop Foreclosure & Lower Monthly Payment." The authors of this ad also tried to wrap themselves in the American flag, but on closer examination, I discovered the e-mail was sent from an address in Panama!
If you want information or assistance with the government's Making Home Affordable programs, it is free from your existing lender or a HUD-approved housing counselor. There is never a fee.
Beware of anyone who asks you to sign over the deed to your home to them and says that's part of their plan to save it from foreclosure.
Check with your existing lender before submitting your mortgage payments to anybody else.
There is only one source for information about the government's programs and that is: www.MakingHomeAffordable.gov