HUD addresses Obstacles to Economic Opportunity

Left to right- Charles R. Lowery, Jr., Director, Fair Lending and Inclusion, NAACP; John R. Bartholomew IV, Staff Attorney, Atlanta Legal Aid Society, Inc., Home Defense Program moderator Reilly Dolan, Associate Director, Division of Financial Practices, Federal Trade Commission and HUD SE Regional Administrator Ed Jennings, Jr.

Attendees listening intently to the panel discussion

HUD Southeast Regional Administrator Ed Jennings, Jr. joined with John R. Bartholomew IV, Staff Attorney, Atlanta Legal Aid Society, Inc., Home Defense Program, Charles R. Lowery, Jr., Director, Fair Lending and Inclusion, NAACP and moderator Reilly Dolan, Associate Director, Division of Financial Practices, Federal Trade Commission in a joint conference of the Federal Trade Commission and the NAACP for a panel discussion recently in Atlanta regarding "Paving the Road to Economic Recovery: Unfair and Deceptive Practices Affecting Housing in the African-American Marketplace."

"Much of the African American family's wealth is centered on their home and so being armed with good reliable information is key when it comes to addressing and avoiding the cost and pain of housing related scams," said Jennings. "HUD certified housing counselors remain a safeguard in that regard as they provide essential foreclosure prevention and homeownership assistance."

Much of the panel's discussion surrounded foreclosure rescue scams and refinance fraud. They related that scam artists offer to act as intermediaries between homeowners and lenders and to negotiate repayment plans or loan modifications. They may even "guarantee" to save the home from foreclosure. They tell the homeowner to make mortgage payments directly to them so they can forward payments to your lender. In reality, they may pocket the money and leave the homeowner in worse shape on their loan. Additional they discussed fake "government" modification programs. Scam artists create web sites that mimic federal Web sites and use business names similar to those used by government agencies. They may also use "federal," "TARP," or other words, acronyms, and abbreviations commonly associated with official government programs. These tactics are designed to fool the homeowner into thinking they are approved by, or affiliated with, the federal government.

And they also discussed leaseback and rent-to-buy schemes. Con artists entice homeowners to transfer the title of their home to them with promises of new and better financing. They tell the homeowner they can rent their home and eventually buy it back. But, if the owner does not comply with the terms of the rent-to-buy agreement, they can lose their money and your home. The agreement may be written in a way that makes it very hard to comply. In fact, the con artists have no intention of ever selling their home back to them. They want their home and their money.

To avoid such scams and frauds homeowners should look to contact ask a legitimate housing or financial counselor for help. HUD-approved housing counselors are available at 1-888-995-HOPE (4673) or makinghomeaffordable.gov. They do not charge a fee for this assistance.

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