As 2012 begins, the California Department of Real Estate is still warning consumers to be wary of promises for loan modification, mortgage relief and foreclosure rescue scams as fraudsters to continue prey on vulnerable, financially stressed homeowners.

The agency, whose mission is to protect the public interests in real estate matters, continues to file several cases against individuals and entities that are illegally offering loan modification and mortgage relief services.

With the economy still struggling, tactics that con artists and third-party operators are using to bilk homeowners include promising reduced monthly mortgage payments in exchange for an up-front fee.

Once the fee is paid, the scammers do little or nothing to obtain the loan modification on behalf of the homeowner.

"It is imperative that law enforcement and administrative agencies work together to ensure consumers get the protection they deserve in these tough economic times," said Barbara Bigby, California's acting real estate commissioner.

Since 2009 over 1,100 administrative actions have been filed in the California Department of Real Estate's database for modification scams. According to the agency, the most common scam involves the issuance of a desist-and-refrain order to an unscrupulous operator to stop their illegal activities.

The California Association of Realtors said there's no need for individuals to use third-party operators, because they may not improve a homeowner's chances of payment modification.

Furthermore, the agency said that certain advice provided by these third parties could be extremely detrimental to working with the homeowner's mortgage servicer.

According to the Federal Trade Commission, these third-party scammers review foreclosure notices in the news media and in public files to identify potential victims.

Advertisements that scammers place online, on television and in newspapers that claim to "stop foreclosure now" and offer "money back guarantees" are suspect and should be reviewed cautiously, the California Realtor group said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.