Various U.S. officials, including Treasury Secretary Tim Geithner, announced a multi-agency crackdown on foreclosure relief fraud today, vowing to “redouble efforts to crack down on schemes that target distressed homeowners and also to share more information and resources across agencies and with state officials,” says the WSJ.

Illinois Attorney General, Lisa Madigan announced at the press conference that Illinois had filed two lawsuits against mortgage rescue scammers.

“Struggling homeowners need to know that free help is available,” Attorney General Madigan said. “We have repeatedly found that these operations are swindling desperate homeowners out of money they can’t afford to lose. The lawsuits I have filed prove they don’t provide any help. They don’t call your lender, they don’t modify your loan, and they don’t represent you in court if you’re in foreclosure. All they do is take your money.”

According to a statement from the AG’s office, the firms charge upfront fees in exchange for help dealing with the victim’s lender or for “orientation” services, which require consumers to enroll in a one-year “membership club” and pay an upfront $575 application fee, $50 enrollment fee and a monthly fee of $69-89, as well as a final “success fee” that ranges from one to two percent of the loan amount.”

Both companies are accused of failing to provide these services to their clients.

“On the state level, more than 150 enforcement actions have been brought against mortgage rescue companies across the country, and the states are increasingly sharing information and leveraging resources with our partners at the federal level,” Madigan said. “By combining our powers in pursuit of this common purpose, state and federal authorities are sending a clear message to operators of mortgage rescue scams: It is not a question of if we’ll come after you; it is only a question of when.”

MADIGAN FILES TWO MORTGAGE RESCUE FRAUD LAWSUITS, SEEKS IMMEDIATE BAN ON COMPANIES’ OPERATIONS [Illinois Attorney General]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.