California's law enforcers are on the look out for foreclosure rescue scams swarming the state as risky-loan meltdown is leaving home owners vulnerable.

"It's certainly an interest of the office," Al Shelden, chief of consumer law in state Attorney General Jerry Brown's office, told Reuters news service.

"We are worried there will be more of these as foreclosures increase. There was a large up tick in these in the early '90s, the last time there was large increase in foreclosures," Shelden added.

Californians are popular targets because high home prices often force buyers into loans they can't afford. Now, those facing defaults and foreclosures are looking for an easy way out and are vulnerable prey for criminals offering a quick fix.

• In sheer numbers, by virtue of larger populations, Florida, California and Texas had the most foreclosure activity in February this year, but California's numbers rose by more than 78 percent from a year ago, according to RealtyTrac, a foreclosure tracking firm.

• At the end of December, a fifth of mortgages in California were loans to subprime borrowers, according to Brown's office.

• The California Department of Corporations, which regulates mortgage lenders, but not brokers, listed mortgage fraud as one of the Top 10 Scams for 2006.

• The Mortgage Bankers Association says California ranks third in the nation for mortgage fraud, behind Utah and Florida.

• Both federal regulators and California legislators are working to tighten regulations on subprime and other loans targeted by the fraud and lenders have begun to tighten underwriting standards.

Mortgage fraud can be designed to illegally get you into a mortgage or to cash in on the value of real estate, or both. But it is also used to fool you into thinking you can easily get out of a mortgage.

Mortgage-related crime has been on the rise since the last housing boom began, initially as a way to pounce on fast-rising home price appreciation.

During the housing boom, mortgage lenders loosened lending standards and offered more and more so-called non-traditional and subprime loans to borrowers who needed the extra leverage, but who also often couldn't afford the payments that later adjusted upward.

Crooks also took advantage of underwriting loopholes to illegally buy and trade in residential property and to dupe home buyers with come-ons.

Since the boom has waned, foreclosures have soared and fraud has grown with scams offering to save home owners from the doom and gloom.

Under the guise of "foreclosure or mortgage rescue services" an underworld of organized crime watches the foreclosure listings like a cormorant circles for fish. Their prey is unsuspecting borrowers who took on loans they couldn't afford. The scams are actually designed to separate unsuspecting consumers from their money, equity, homes or all of the above.

"Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-Stripping Foreclosure 'Rescue' Scams", a National Consumer Law Center report, says the scammers come in several varieties but you can avoid becoming a victim.

To steer clear of all types of mortgage fraud, the experts advise:

• When applying for a mortgage, don't lie to your lender about your income, your down payment source, or the nature and length of your employment. Don't lie to yourself. Borrow only what you can truly afford to repay.

• Don't be a rube. If it sounds too good to be true-it probably is. Debt, bad credit and other financial holes didn't appear over night. They won't magically vanish over night.

  Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans and credit card and other debts for an up-front fee. Likewise, beware of offers to "save" you from defaulting on loan payments or from foreclosure. Steer clear of lenders who say they are you only chance to land a mortgage.

• At the first sign of trouble paying your mortgage, before you are late for the first time, call your mortgage lender and stay in touch until you are in the clear or have planned a work out.

• Ask family, friends, co-workers and others you trust who also recently had mortgage troubles and successfully overcame them for insight and referrals.

• Don't sign blank documents, documents containing blank sections or documents you don't understand. Get help from trusted individuals to go over the terms of the deal.

• Obtain credit and financial counseling, attend home buying classes, seminars or workshops and otherwise bone up on your home buying education before taking the plunge.

Published: March 29, 2007

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.