Banks are being warned about a principal reduction scam that falsely claims endorsement by the administrator of national banks.
The warning was issued yesterday by the Comptroller of the Currency to chief executives of banks and state and federal banking regulators.
According to the alert, a group using the names of “Mortgage Principal Reduction Program” and “Bankers Acceptance Program” has allegedly been touting that the OCC has scrutinized and monitored the program.
Prospective customers — delinquent borrowers facing foreclosure — are promised that a large portion of their mortgage debt can be eliminated for a fee of “25 percent of the existing outstanding mortgage amount,” the bank regulator said.
“The OCC has no knowledge of this entity, nor does the OCC have any knowledge of its alleged principal, Mr. Alan Tikal,” the warning states. “Mr. Tikal is not a registered private banker with the U.S. Department of the Treasury, as is alleged on the group’s Web site.”
The OCC noted that the phone number listed on the Web site is “a private cellular telephone number.”
