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Fears of scams hinder housing aid

By Judy Martel · Bankrate.com
Wednesday, June 27, 2012
Posted: 5 pm ET

Homeowners in danger of losing their property often aren't taking advantage of various government assistance programs. Why? They're afraid of being scammed.

With the flood of information, advertisements and offers of mortgage assistance to homeowners from all corners, it's not a bad thing to be cautious. Money Management International, a counseling firm with approval from the Department of Housing and Urban Development, or HUD, says 53 percent of those who responded to a survey confirm that they don't seek help because they are afraid of scams and fraudulent services.

But nearly three quarters of those who do get help from assistance programs usually end up with a mortgage solution, according to studies conducted by HUD.

Lack of effective marketing is another problem: Many homeowners are unaware of the existence of programs that will help them. According to HUD, the Home Affordable Modification Program, or HAMP, which had a goal of reaching 3 million to 4 million borrowers, has assisted fewer than a million as of March.

Finally, many homeowners use the "head-in-the-sand" approach to dealing with an inability to meet their monthly mortgage payments, say some experts. Others are embarrassed to confess their financial struggles.

If you need mortgage help, but are worried about scams, make sure you research any assistance or counseling offers. This column on mortgage modification offers more details, as does this article on help for victims of mortgage scams.

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