Unfortunately, some people have seen the abysmal housing situation in the U.S. as an opportunity to take money from struggling individuals and families.

We’ve written often about the many guises of foreclosure rescue scams and how to protect your home from foreclosure.

In July, the Federal Trade Commission announced Operation Loan Lies, a “coordinated national law enforcement effort to crack down on mortgage modification scams.”

178 Companies Targeted for Scams

Operation Loan Lies includes four separate lawsuits, meaning that the FTC will have started action in 14 separate cases since April.

Typically, a foreclosure rescue scam works like this to separate unsuspecting homeowners from their money:

• Promise to help: Scammers typically claim to be able to halt, prevent or delay foreclosure or modify the terms of your home loan. Their message attracts those who are having difficulty making payments and are growing desperate to save their homes.
• Demand for money – or more: Once a scammer has promised to assist his victim, he asks for payment up front or assures the homeowner that he can only help if the deed to the house is in his name.
• Fail to follow through: Scammers then do little or nothing to help the distressed homeowner. Some leave town with the money; others evict the family once they have the rights to their property.

While such a scheme may seem blatantly suspicious in writing, to those in danger of losing their homes, the promises of these scammers often sound like the only good news they’ve heard in a long time.

Learning from Others’ Mistakes

The FTC’s game plan goes beyond legal action: it has created and posted this foreclosure warning video, which features people who were victimized by foreclosure rescue scams and provides information about how to deal with the threat of foreclosure.

FTC is Following Through

In early April of this year, a number of consumer advocates (including Attorney General Eric Holder, FTC Chairman Jon Leibowitz, Treasury Secretary Timothy Geithner and others) announced that they planned to increase enforcement against people preying on distressed homeowners.

This move seems to be evidence that they’re following through.