Most of these scams ask homeowners for an upfront fee in order to start a loan modification program. At best, the homeowners may end up paying for work that is completed by the group asking for the money, however, it's work that likely could have been done for free through other non-profit organizations or loan-modification assistance programs (i.e. Community Housing Council, a non-profit based in Fresno). At worst, the homeowners pay for work that isn't done at all.

The scams are typically initiated over the phone or through the mail, however, the people running the scams sometimes show up at the homes they're targeting. The companies will then offer the distressed homeowner their services to renegotiate the mortgage in exchange for an up-front fee amounting to one month's mortgage payment or more.

Just last week, in Modesto, "some homeowners attended a workshop in which they were asked to pay $3,500 for getting their mortgage woes resolved," (San Jose Mercury News, 10/27/08).

The FBI is aware of this problem, as they report to having 1,569 pending mortgage fraud investigations open as of last month. However, it is clear that number will rise and more resources will need to be poured into combating mortgage fraud, as incidences of it has annually doubled between 2003 and 2007.

The FBI has also been taking some flack recently due to their late arrival to all of the rampant mortgage fraud that's been taking place over the last couple years, but part of that is due to the agency not having enough agents to cover the continuing spread of mortgage fraud, as the housing and foreclosure crisis gets worse. The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of the nation’s economic woes.

Agencies that may be able to assist you are:

Garden Grove Police Department
Pete Arrellano
Major Fraud
11301 Acacia Parkway
P.O. Box 3070
Garden Grove, CA 92842

Orange County Sheriff's Department
Criminal Investigations Division
Economic Crimes Detail
550 N. Flower Street
Santa Ana, CA 92703

Orange County District Attorney
Economic Crimes Unit
401 Civic Center Drive
Santa Ana, CA 92701

California Department of Real Estate
320 W. 4th Street
Suite 350
Los Angeles, CA 90013

California Association of Realtors
525 S. Virgil Avenue
Los Angeles, CA 90020

To report suspected economic abuse of the elderly or dependent adults, immediately call:

County of Orange Social Services Agency
Adult Protective Services Agency
Adult Abuse Registry
1505 E. Warner Ave.
Santa Ana, CA 92705