Federal and state officials announced a coordinated campaign Monday to combat a rising tide of con artists who use mortgage-relief scams to bilk homeowners struggling to stave off foreclosure.
As the housing crisis and job losses from the recession have combined to push more Americans to the precipice of foreclosure, fraudulent mortgage-relief services for homeowners have surged, Attorney General Eric Holder said, with the FBI investigating 2,100 mortgage-fraud cases - five times the number five years ago.
"The unscrupulous actions of individuals and companies to exploit the misfortune of others is despicable. It's immoral, and it's also illegal," Holder said.
One tip-off that an offered service might be a scheme is that it asks homeowners to pay up-front fees, officials said. They stressed that none of the new programs announced by the Obama administration in recent weeks requires upfront fees.
Given the huge size of the mortgage crisis and the relatively limited resources of state and federal investigators, it was unclear how much impact the new campaign would have.
But the White House has been looking for ways to demonstrate its concern for the difficulties of struggling homeowners, especially in view of the popular backlash against its bank-bailout program. Among the first public events Obama has planned this week after he returns from Europe is one highlighting the number of Americans who have benefited from refinancing their homes at lower interest rates this year.
And no fewer than three Cabinet members and the head of a federal agency came together to announce the attack on schemers. In addition to Holder, Treasury Secretary Timothy Geithner, Housing and Urban Development Secretary Shaun Donovan and Federal Trade Commission Chairman Jon Leibowitz appeared before the television cameras.
Leibowitz, who announced that the FTC has filed civil lawsuits against five companies that are alleged to have run mortgage-fraud schemes, noted that four of them are charged with using copycat names and logos to trick homeowners into believing the companies were working with the government.