Officials crack down on mortgage fraud

LOS ANGELES "Too many homeowners are paying money in advance because they're desperate. And they're coming up with nothing ... empty-handed ... because they have been scammed by unscrupulous people," said Brown.

If you are facing foreclosure and you want to hire a so-called loan modification firm, the state attorney wants you to know that the firm needs to be registered and bonded to do business in the state of California.

The attorney general's office sent out letters to nearly 400 mortgage foreclosure consultants directing them to register with the state and post a $100,000 bond.

Brian Batiste was an alleged victim of loan modification fraud. He is out $2,800 to a firm that promised to modify his loan. He ended up working with the lender himself.

"I got no result from them. Upfront fees started at like $4,000, then it went down to $3,500. I actually prepaid with $2,800," said Batiste. "And during that period of time when they were soliciting my business, the communication was great."

The state has received hundreds of complaints this year from homeowners being ripped off by foreclosure consultants. So if you are looking for free advice, some say you should contact the state's real estate commissioner.

"You should not be doing this with someone that isn't licensed, isn't an attorney, or isn't a foreclosure consultant," said Jeff Davi, California Real Estate Commissioner. "Make sure you check them out first. That's the key."

If you feel you've been ripped off, Attorney General Brown says the quicker you report it his office, you increase your chances of getting your money back.

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