The ongoing economic downturn and the crash in the real estate market have put millions of American homeowners in tough positions.?Recent news reports say more than 13% of American mortgages are overdue or in foreclosure, an effect likely to be buoyed by high unemployment and the aftereffects of the exotic and subprime loans made during the housing boom. Unfortunately, large numbers of scammers disguising themselves as ?foreclosure rescue? companies and loan modification ?consultants? have sprung up to take advantage of those homeowners. As state and federal lawsuits show, far too many of them are successful at taking homeowners? desperately needed money, sending them even deeper into financial trouble for no gain.

Fortunately, the federal government has launched multiple programs to fight both the foreclosures and the scammers. To help homeowners navigate the complicated and sometimes confusing collection of federal resources,?the Federal Reserve Board has collected links to those resources on one page. There, struggling borrowers can find resources to help them avoid foreclosure; apply for the federal Making Home Affordable refinance and loan modification programs; avoid foreclosure rescue scams; and address related issues like credit repair, taxes and loans. The Fed has also established?Foreclosure Rescue Centers at each of its 12 district offices, where it connects homeowners with community and local organizations working with troubled homeowners.

The size of this foreclosure crisis, which set new records for foreclosure and bankruptcy rates, is part of the reason the federal government is actively intervening to stop foreclosures. Foreclosures ultimately threaten our nation?s economic stability by threatening the housing market. When a home is foreclosed on, the bank typically loses money. In this market, it is also likely to sell the home at a low price, depressing housing prices. Those prices can be driven down further if the home sits vacant and unmaintained for a long time, because unkempt yards and dilapidated buildings tend to lower the price of the real estate nearby, even if those homeowners are still current on their loans. And of course, the housing downturn has negative effects on real people, who lose their investments, their communities and their dreams along with their homes.

According to the president of the Mortgage Bankers Association, nearly 50% of borrowers who face foreclosure haven?t talked with their lenders, sometimes out of embarrassment and shame. (The MBA?s members have also faced negative publicity after numerous published reports that homeowners? efforts to talk to their lenders were met with red tape, incompetence or incorrect denials. This has led to a growing number of lawsuits from consumers and their personal injury attorneys.) We do not believe anyone should lose their home just because they were too embarrassed to face discussing their financial problems. And we believe even more strongly that the foreclosure rescue scammers who prey on desperate homeowners would be out of business if all homeowners took the time to educate themselves about what to watch for. That?s why we strongly urge homeowners in financial trouble to take advantage of the resources offered by the federal government.