Fed cracks down on mimic mailings


November 09, 2008|By Dan Thanh Dang

The Federal Reserve is cracking down on scams targeting distressed homeowners that mimic mailings sent out by mortgage industry alliance HOPE NOW, a group brought together under the arm of the U.S. Treasury to modify mortgages for people at risk of losing their homes.

Chairman Ben S. Bernanke said the Federal Reserve reached out to the Federal Communications Commission last month to warn homeowners about a Web site that copied the alliance's site. The scam site has been shut down.

But HOPE NOW says that "copycat" mailings have also been sent to homeowners. Those letters contain a phony toll-free number to call for help that charges homeowners a fee for making the call. HOPE NOW Executive Director Faith Schwartz told Reuters news service, "All of the regulators and all of us need to be vigilant about making sure that all services are free. We have to get out to the media and the public that counseling should be free; validate who you are talking to."

For more information on the HOPE NOW free foreclosure advice program, go to http://www.hopenow.com/.

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