FOR IMMEDIATE RELEASE
Phone: 212-459-8888
Fax: 212-459-8855
Agency Twitter: @NYSConsumer

Date: March 4, 2010

Statewide ?Loan Modification Scam Alert? Campaign Launched
As Part of NYS Consumer Protection Board?s Annual Consumer Action Day

Event Also Offered a Variety of Free, Confidential Assistance to New
Yorkers

The New York State Consumer Protection Board (CPB) today marked 2010
Consumer Action Day by joining with NeighborWorks America and other
partners in the statewide launch of a ?Loan Modification Scam Alert?
campaign. The campaign provides homeowners facing the possibility of
foreclosure with vital information to guard against loan modification
scams, find trusted help and report illegal activity to authorities.

CPB Chairperson and Executive Director Mindy A. Bockstein was joined by
representatives of NeighborWorks America, the Empire Justice Center and
several State agencies at a press conference in Albany

With the national foreclosure rate at an all-time high of 8.85 percent,
and the rate in New York near 7.78 percent, many homeowners have turned to
loan modification or foreclosure ?rescue? companies for help - - only to
realize that they?ve been scammed. These scam artists use slick
advertising and sales pitches to bilk homeowners out of money, and often
times their homes. The parties may pressure the homeowner to sign
paperwork that they didn?t have time to read and understand, claim the
process will be relatively quick, advise the homeowner not to contact a
lawyer or their lender or falsely claim to be affiliated with the
government.

?The current economic climate has provided fertile ground for con artists
who seek to take advantage of desperate and distressed homeowners,? said
Bockstein. ?That?s why we?re alerting New Yorkers to the dangers of loan
modification scams. If you?re having difficulty meeting your mortgage
obligations and are facing foreclosure, be mindful of the red flags and
aggressive tactics that may indicate suspicious activities. We urge you to
access free foreclosure counseling services instead of going to a for-pay
company which may actually accelerate foreclosure by making big promises
but doing little or no work, redirecting mortgage payments or taking title
to your home. ?

?Anybody can be a victim of a loan modification scam,? said Deborah
Boatright, Northeast District Director of NeighborWorks America. ?Too many
New Yorkers are losing thousands of dollars and their homes to scam
artists. Avoid anyone that asks for a fee in advance, which is often
illegal, guarantees they can stop a foreclosure or modify a loan, or
advises you to pay them and not your lender. Only your lender can modify
your loan. Homeowners need to know that there are free services available
to anyone seeking help from highly trained, highly qualified professionals
in non-profit organizations throughout New York State.?

The Financial Crimes Enforcement Network reported in the third quarter of
2009, depository institutions submitted more than 15,000 mortgage loan
fraud reports, a 7.5 percent increase over the same period in 2008. NYS
ranked third in the number of reports. The FTC recently reported a rise in
the number of fraud complaints involving foreclosure rescue services and
loan modification consulting.

?Knowledge is the best defense against loan modification scams,? said
Kirsten E. Keefe, Senior Staff Attorney with the Empire Justice Center.
?That?s why it?s so important to give homeowners the tools they need to
avoid scams and obtain quality assistance from experienced housing
counselors or legal service providers at no charge.?

As part of the loan modification scam alert campaign, the CPB is
partnering with several State agencies to get the word out.

"Unfortunately, with every crisis there are unscrupulous individuals who
look for ways to take advantage, as we have seen with these scams. While
New York State has taken strong measures to protect consumers on mortgage
modifications, we believe that reaching and educating consumers about
these dangers is an important and necessary step in our joint efforts to
fight mortgage fraud and abuse," said Richard H. Neiman, Superintendent of
Banks for New York State and chair of the Governor's HALT Task Force.

DHCR Acting Commissioner Brian Lawlor said, ?I want to thank our agency
partners, and NeighborWorks America for reaching out to help New Yorkers
avoid foreclosure scams, which are becoming more sophisticated and
aggressive every day. New York State has a comprehensive strategy to
address the subprime foreclosure crisis, and no-cost, quality services
from professional housing counselors and legal service providers are at
the forefront of this effort. DHCR has funded housing counseling services
in every part of the state and we urge homeowners with subprime mortgages
to reach out at the first sign of trouble and to be wary of anyone who
charges a fee or promises quick results.?

?During these tough economic times, more and more New Yorkers are finding
themselves in difficult financial straits,? said Colleen Gardner, Acting
Commissioner of Labor. ?If you are having trouble making your mortgage
payment, please go to a free counseling service for help. A for-pay
company will be glad to take your money, but may not even help you.?

?As the agency charged with licensing real estate brokers and salespeople,
the Department of State is working hard to ensure that only the most
trustworthy individuals are able to list and sell New York real estate,?
Secretary of State Lorraine Cortés-Vázquez said. ?We want to make sure
that New Yorkers can stay in their homes and don?t feel threatened by
unscrupulous agents, and that?s why individuals who are unsure of their
rights or feel vulnerable should take advantage of the resources offered
by the state and its partners in consumer protection.?

The launch of this awareness campaign follows the enactment of
comprehensive foreclosure legislation by Governor David A. Paterson last
year which provides additional critical protections for New York State
homeowners, tenants and neighborhoods in the wake of the ongoing
foreclosure crisis. These amendments, involving expanded notice to
homeowners, tenants and the Banking Department, as well as providing for
mandatory settlement conferences for all home loan borrowers, build upon
Governor Paterson?s landmark subprime lending reform law of 2008. Under
NYS law, a distressed property consultant must enter into a written
contract with the homeowner, is prohibited from taking power of attorney
from a homeowner and cannot take any upfront fees until having provided
the services agreed to under the contract.

?The laws we have passed in New York have stood as a national model for
foreclosure mitigation,? said Governor Paterson. ?This effort is about
keeping New Yorkers in their homes and protecting them during this
economic crisis.?

New Yorkers facing foreclosure can find a free housing counselor by
visiting the website of the NYS Division of Housing and Community Renewal.
For more information about the loan modification scam alert campaign or
to report a scam, visit www.loanscamalert.org or call 1-888-995-HOPE
(4673).

The foreclosure press conference was the highlighted feature of the CPB?s
Consumer Action Day (CAD), where hundreds of New York consumers took
advantage of information and direct services offered by more than thirty
State, federal and not-for-profit agencies at the Empire State Plaza. The
event was the kick off of New York State?s commemoration of National
Consumer Protection Week. ?Consumer Action Day brings together many
organizations to provide assistance and information to consumers,? said
Mindy A. Bockstein, CPB?s Chairperson and Executive Director. ?In these
hard economic times, the CPB and its partners are striving to empower
consumers with he information and tools they need to protect their safety,
security and pocketbooks.?

The CPB, established in 1970 by the New York State Legislature, is marking
its 40th anniversary as the State?s top consumer watchdog and think tank.
The CPB?s core mission is to protect New Yorkers by publicizing
unscrupulous and questionable business practices and product recalls;
conducting investigations and hearings; enforcing the ?Do Not Call? law;
researching issues; developing legislation; creating consumer education
programs and materials; responding to individual marketplace complaints by
securing voluntary agreements; and, representing the interests of
consumers before the Public Service Commission and other State and federal
agencies.

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To file a consumer complaint with the NYS Consumer Protection Board (CPB),
call our toll-free hotline at 800-697-1220 or visit the CPB?s website at
www.nysconsumer.gov. In addition to the online complaint form, the website
is home to important consumer safety information.

Jorge

Jorge I. Montalvo
Director of Strategic and Virtual Consumer Programming
NYS Consumer Protection Board
Ph: +1 (518) 486-3703

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