If you're in trouble with your mortgage, beware of those who offer to help

The mortgage foreclosure crisis has sparked a cottage industry of "foreclosure rescue" companies. But advocates and government officials warn that a significant number are little more than fraudulent operations designed to separate distressed homeowners from their money, and sometimes their houses.

"They prey upon the financially unsophisticated," said Gail Cunningham of the National Foundation for Credit Counseling.

"With people losing homes, you're at your most vulnerable," said Roscoe Howard, a Treasury Department spokesman. "It's a lot like being a poor swimmer and being thrown into a lake; you're going to reach for whatever you can."

Even for wary consumers, it may be hard to tell if the line being thrown by a company will sink you. A letter sent by Bridgewater, N.J.-based Financial Solutions Today LLC is a good example.

The letter is designed to resemble a form from the Internal Revenue Service. It suggests the recipient "may be eligible for a special modification program according to guidelines created in conjunction with the Government Stimulus Program HR 1106: Helping Families Save Their Home Act."

The bill that bore that number in the House of Representatives actually used the plural "Homes" in its title, a misspelling that consumer advocates say should be a red flag.

The letter states "only an attorney or licensed debt adjuster can legally represent a borrower for a mortgage modification." That's not true, said Dan Crevina, director of operations and marketing at the BBB of New Jersey. "There's no need to have representation to call the bank," he said.

Financial Solutions Today's president, Frank Riccio, said the letter was changed weeks before the copy obtained by the Associated Press was received.

Riccio declined to discuss his business practices, beyond the letter.

Yet Financial Solutions Today is accredited by the BBB. That means it was reviewed by the consumer watchdog and pledged to abide by ethical standards.

One comment in the Financial Solutions letter even echoed advice from government agencies: "Beware of companies that ask you to pay for services upfront."

Nonprofit agencies don't charge for the services they offer, and some states prohibit lenders from charging fees in advance of providing services.

Homeowners can call the government's Hope Now program at 888-995-HOPE or visit http://hopenow.com to find legitimate assistance.

Details about government programs and counseling referrals are available at www.makinghomeaffordable.gov.

Eileen AJ Connelly is an Associated Press personal finance writer.