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Changes to mortgage rules offer scammers a chance to cheat homeowers

Homeowners who are "under water" with their mortgages can refinance under the Home Affordable Refinance Program (HARP), but the Better Business Bureau is warning 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 Fred T. Elsberry, Jr., president and chief operating officer of the Better Business Bureau serving Metro Atlanta, Athens and northeast Georgia.

"There are already hundreds of websites claiming to be able to help homeowners through the HARP process, but many of them are rip-offs and scams."

BBB is warning all homeowners who are thinking of applying for a HARP refinance to:

-- Deal directly with your lender first, and never make payments to anyone other than your lender.

-- Don't pay upfront fees to anyone who promises to provide counseling, takes care of the paperwork for you, or stops 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.

-- Report scams to BBB at www.bbb.org/us/scam-source.

The changes to the HARP program were announced 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.

Some lenders will begin accepting applications as early as today, although many will take a few weeks or even a few months to roll out the program. 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.

Check out businesses and charities before you buy, donate or invest at www.bbb.org. Additional mortgage and credit-related tips are available at www.bbb.org/us/clearpoint-tips.