TARP on the Lookout: The Federal Government Shuts Down Mortgage Relief Scams

You may not have heard of it, but it’s watching out for you: TARP, the Troubled Assets Relief Program. The federal government created TARP to reduce fraud, waste, and abuse and to purchase assets and equity from financial institutions to strengthen its financial sector. Signed into law by George W Bush in 2008, TARP was a response to the subprime mortgage crisis. While its success has long been under questions, TARP has in fact seen some success lately. To date, “of the total $700 billion bailout money, banks, other financial institutions and U.S. carmakers received $413.4 billion, of which, about 77% (nearly $317.6 billion) has been recovered by the government” (see article).

Along with focusing on helping struggling financial institutions, TARP also acts as a kind of consumer watchdog. This week, TARP shut down hundreds of shady relief sites that advertise on large search engines. To bolster their efforts, Google has since suspended relationships with 500 advertisers and agents linked to the online mortgage fraud scams that advertised on its search engine and Microsoft, for its part, cut off 400 advertisers this week. Purchasing certain search words like “foreclosure assistance” and “loan modification,” these groups seek out distressed homeowners as they search online for guidance (see article).

These scams can target homeowners in a number of ways: they can require up-front fees for supposed assistance and, in extreme cases, they advise borrowers to cease paying their loans and cut communication with their lenders. Often claiming to be associated with government agencies, these scams can lead to thousands of dollars in losses and credit issues for homeowners who fall prey to them.

Should you be searching for assistance with your loan, be wary of what you find in your searches. Make sure to do your due diligence and check out any groups claiming to offer help. Consult your Realtor, lender or banker before committing to anything and always be wary of anyone requiring money up front.

For further assistance, the government has set up a hotline to answer questions and offer guidance to distressed homeowners; for more information, call the Hope Hotline at 1-888-995-HOPE (4673) or go online to http://www.makinghomeaffordable.gov/pages/default.aspx.

Author: kimhuntkw

We specialize in Real Estate in the Pleasanton, Dublin and Livermore areas of the East Bay in California

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