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BBB Warns Homeowners: Changes to Mortgage Rules Bring Out Scammers
December 28, 2011

Pittsburgh, PA (December 13, 2011) – Starting this month, some homeowners who are “under water” with their mortgages are now able to refinance under the Home Affordable Refinance Program (HARP). The Better Business Bureau is warning consumers that banks and mortgage companies aren’t the only ones gearing up for the rush of applications.

“Whenever there is a new or updated government program that appeals to consumers, but may be a bit confusing, scammers come out of the woodwork to take advantage of the situation,” said Warren King, President of the Better Business Bureau of Western PA. “We expect that many websites claiming to be able to help homeowners through the HARP process may actually turn out to be rip-offs and scams.”

BBB is warning all homeowners who are thinking of applying for a HARP refinance to:

• Deal directly with your lender first and never make payments to anyone other than your lender.
• Don’t pay upfront fees to anyone who promises to provide counseling, take care of the paperwork for you, or stop the foreclosure process.
• Be wary of anyone who tells you not to contact your lender, a lawyer or a credit counselor, or who asks for payment by cashier’s check or wire transfer.
• Never sign over your deed to anyone or allow yourself to be pressured into signing something you don’t understand.
• Be especially careful of look-alike and sound-alike websites.
• Find out if you qualify by visiting Making Home Affordable’s website or by calling the Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673) to speak to a HUD-approved housing counselor for free.
• Report scams to BBB at www.bbb.org/us/scam-source.

The changes to the HARP program were announced by President Obama in October to allow homeowners to refinance at lower interest rates, even if their home is currently worth less than their mortgage. The new HARP rules apply to homeowners who are current on their payments and whose loans are backed by either FannieMae or FreddieMac. Some lenders began accepting applications as early as December 1, although many will take a few weeks or even a few months to roll out the program. More than one million borrowers are expected to apply for the program, according to the Federal Housing Finance Agency, which oversees the two major mortgage lending programs.

For further information and to review businesses and charities before you buy, donate or invest, visit www.bbb.org.

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