Beware a mortgage rescue that seems too good to be true

As if homeowners behind on their mortgages didn't have enough to worry about, now they have to be wary of loan modification scams.

According to the L.A. Times, mortgage scammers are on the rise in California, preying on homeowners desperate for the help promised by the Obama administration that might allow them to avoid foreclosure.

The article tells the story of Maricela Castellanos of Hesperia, Calif., who missed her first mortgage payment a year ago. After her mortgage fell into default, a letter that appeared to be from her lender notified her she was eligible for a free loan modification program, and she took the bait.

A phone call a couple of days later offered more details and a more affordable loan, so she started sending her payments to a postal box.

• Tips to help you avoid a mortgage scam.

Castellanos was one of the lucky ones. The California Department of Justice already had followed the trail of fraud to the source, and just hours after a nerve-racking conversation with her bank in which she learned that none of her payments had been received by them, justice came knocking at her door. From the Times article:

Sandy Birch, an investigator with the California Department of Justice, had arrived with a cashier's check Castellanos had sent to a post office box in the San Fernando Valley.

"I want to know why you were sending money there," Castellanos recalled Birch asking her.

Then Castellanos told her story, a familiar tale after hundreds of homeowners already had called the California attorney general's office about alleged mortgage scams. But it was too late for many of them, whose efforts to stop foreclosure actually had the opposite effect. Like Castellanos, these victims thought they were back in their bank's good graces. But by the time they figured out the deal was a scam, they'd already lost their homes.

One woman has been tried and sentenced in the ring believed to have defrauded Castellanos, but the alleged ringleaders remain at large. And there are likely plenty more scammers out there, waiting for their next victim. From the Times article:

Law enforcement officials say the scams are becoming increasingly prevalent, especially in California, where the Department of Real Estate has reported an explosion from 10 open cases a year ago to more than 750 this spring. Nationally, U.S. Attorney General Eric Holder has said that the FBI's "rescue scam" caseload is up 400% from five years ago.

The Times also writes that the number of foreclosures is expected to continue to grow, so don't be a victim twice. If you fear you won't be able to pay your mortgage, do yourself a favor and pay a visit to the bank before something like this happens to you.

By the way, this story does have a happy ending. Castellanos and her real bank hammered out a real loan modification, and she and her family are still living in their home.

Have you been the victim of a mortgage scam? Or if you were a potential victim, what clued you in that the deal might not be legit?