Beginning last month, some homeowners who are “under water” with their mortgages can now refinance under the Home Affordable Refinance Program (HARP). However, the BBB warns 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 may be a bit confusing, scammers come out of the woodwork to take advantage of that confusion,” said Dana Badgerow, BBB President and CEO. “There are already hundreds of websites claiming to be able to help homeowners through the HARP process, but many of them are fraudulent.”
The BBB warns all homeowners who are thinking of applying for a HARP refinance to:
- Deal directly with your lender first and don’t 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 going to www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx or by calling the Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673) to speak to a HUD-approved housing counselor for free (assistance is available in English and Spanish, and in other languages by appointment).
- Report scams to the 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. 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.
If you have credit problems, find a credit counseling agency in your area by calling 800-388-2227 (en Espanola 800-682-9832).
Additional mortgage and credit-related tips are available at www.bbb.org/us/clearpoint-tips.
The mission of the Better Business Bureau is to be the leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public. Our hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at www.bbb.org or 651-699-1111, toll-free at 1-800-646-6222.