Now Playing: Fed Fights Housing Scams
Government runs ads in movie theaters warning about mortgage fraud.
March 29, 2009 -- Mourad Zramdini was living the American dream. A good job, fancy car and a brand new home. Walking along a well-manicured street in a brand new development outside of Washington D.C., he points out the condo that used to be his.
Zramdini's dream turned dark after he lost his business and could no longer afford his more than $400,000 mortgage and the steep monthly payments. He needed to refinance, but instead of going to his lender, he went to a company he found on Craigslist, the online classified site.
The company said they could negotiate a lower monthly payment for him but he had to pay up front, $2,500. And they ordered him to stop making his payments. Zramdini trusted the company. He paid the money and stopped paying his mortgage. His debts started to mount, creditors started to call and he started to worry that he'd made a mistake. But when he called the company, all he got were busy signals and long hold times.
"The next thing I know there is a sign on the door and the lock is changed," he says.
Now Zramdini lives in a rental unit, all his credit cards have been revoked and he has creditors calling him every day about the tens of thousands of dollars he owes on a house that he no longer owns. He had been doing everything right, he says, paying all his bills on time for years. Now his financial reputation is ruined.
"My credit is messed up, so messed up now, big time," he says. "It's a nightmare."
It turns out Zramdini might have avoided his run-in with a housing scam if only he had gone to the movies.
In an unprecedented effort to educate homeowners about the danger of mortgage fraud, the Federal Reserve is about to begin airing an awareness campaign in the nation's movie theaters.
Starting April 9, the public service announcements will air in theaters across the country -- mostly in states hardest-hit by foreclosures. The 30-second spots give warning and advice.
"Having trouble keeping up with your mortgage payments?" the ads run. "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 FederalReserve.gov and click on 'Five Tips For Avoiding Foreclosure Scams.'"
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