This story comes on the heels of the release of the FBI’s 2008 Mortgage
Fraud Report Year in Review
.  The FBI
noted an upswing in both the number and types of mortgage fraud in 2008,
including phony foreclosure rescue schemes like the one in the Times, and the trend is expected to
continue into this year. It’s no surprise, now that the real estate boom is
resoundingly over, that opportunistic mortgage fraudsters who once lived high
off the subprime market are forced to find new work. The increasing number of
people facing foreclosure is fertile ground for individuals looking to commit
One way to circumvent this problem is to provide more
resources to reliable, HUD-certified housing counselors. These agencies can
help troubled homeowners find the best possible way to stay in their homes and
avoid foreclosure—about 45% of those who completed counseling were able to
remain in their homes, which is a much higher number than those who do not
complete counseling. Unfortunately, demand for services often exceeds what
these counselors can currently provide. Woodstock Institute and Housing Action
Illinois recently issued a report
detailing the strains on housing counselor capacity and gaps to access to
counseling services in the Chicago region. Some of the report’s recommendations
include increasing resources for counseling agencies, making sure counselors
are well-trained and have access to technical assistance, and increasing
outreach to homeowners facing foreclosure.
HUD-certified housing counselors provide the
invaluable service of keeping as many families as possible out of foreclosure.
We need to ensure they have the resources they need to do their work and keep
homeowners away from fraudulent foreclosure counselors and loan modification
scams. In addition to strengthening reliable housing counselors, increasing direct
assistance to homeowners
and improving the loan
modification process
are vital to avoiding the damaging effects of
foreclosure on families and communities.