Watchdog halts dozens of mortgage-modification scams

A federal government watchdog agency announced Wednesday that it has shut down 85 alleged online mortgage-modification scams that go after homeowners through website advertisements. 

As part of an ongoing criminal investigation into the scams, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) worked with Google to suspend relationships with more than 500 Internet advertisers and agents associated with the 85 alleged online mortgage fraud schemes.

SIGTARP is looking into websites that fraudulently claim to help struggling homeowners lower their mortgage payments, usually for a fee, through the Home Affordable Modification Program (HAMP), a housing program overseen by the TARP.

“The first place many homeowners turn for help in lowering their mortgage is the Internet through online search engines, and that’s precisely where they are being taken advantage of and targeted,” said Christy Romero, deputy special inspector general for TARP.

“Web ads that offer a false sense of hope may not be legitimate and can end up costing homeowners their home,” she said.

“SIGTARP is diligently working on every level to stop these frauds, to protect homeowners from being victimized and to hold accountable criminals who defraud homeowners in connection with HAMP and other TARP programs.”

The most common schemes include asking homeowners for an up-front fee while telling them to stop paying their mortgage and cease all contact with their lender. 

The schemes included diverting mortgage payments to the scammers, transferring property deeds and releasing sensitive personal financial information.

In some cases, the websites claimed to be affiliated with the U.S. government through the use of a government seal or name similar to a government agency.