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ICBA Offers Tips to Help Consumers Guard Against Loan Scams

Washington, D.C. (August 1, 2011)—Even though it has been years since the height of the subprime mortgage crisis, many Americans continue to receive fraudulent offers of foreclosure and refinancing assistance, both in the mail and online.  The Independent Community Bankers of America (ICBA) and the nation’s more than 7,000 community banks want consumers to know how to protect themselves from these financially detrimental loan scams. 

“Too many Americans are still being targeted by scams that promise to help them avoid foreclosure or refinance their mortgage to a lower rate,” said Sal Marranca, ICBA chairman and president and CEO of Cattaraugus County Bank in Little Valley, N.Y. “The best protection is good information.  Community bankers want to be sure that consumers know the warning signs that they may be dealing with a scam artist and how to protect themselves so that they don’t wind up in an even worse financial situation.”

First, if you are having financial troubles, you should contact your mortgage lender immediately. By taking the direct approach, you will be less likely to be taken in by those pitches offered by way of unsolicited phone calls, e-mails or letters that appeal to your worst fears.

Consumers should be wary of any company that does the following:

  • Guarantees to stop the foreclosure process—no matter what your circumstances.
  • Instructs you to not contact your lender, lawyer or credit or housing counselor.
  • Collects a fee before providing you with any services.
  • Accepts payment only by cashier’s check or wire transfer.
  • Encourages you to lease your home so you can buy it back over time.
  • Tells you to make your mortgage payments directly to them, rather than your lender.
  • Tells you to transfer your property deed or title to them.
  • Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.
  • Offers to fill out paperwork for you.
  • Pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

If you think you have been the victim of a loan scam, you should contact your state attorney general’s office to file a complaint and learn the next steps to repair any damage incurred as a result of the scam. For additional tips, you can also check the following resources:

“Community banks are here to help our customers with legitimate programs and loan options that are tailored to each individual’s situation,” Marranca said. “We never take a cookie-cutter approach.  That’s the last thing people need when they’re facing financial difficulties.”

Learn more about community banking www.icba.org. To find a community bank, visit ICBA’s community bank locator by clicking here