Many homeowners are familiar with the offers they get in the mail advertising mortgage relief or refinancing programs. Some of the offers seem too good to be true, and a recent action by the Federal Trade Commission suggests that they are not true.

One of the companies being sued by the FTC was inducing mortgage holders to enter a “mass joinder” suit, which is similar to a class action lawsuit. The offers frequently focus on refinancing or resolving disputes with lenders. The companies asked homeowners to pay between $6,000 and $10,000 and in many cases provided nothing or very little in return. For people facing foreclosure, this can cost both precious time and money. A nonprofit group estimated that homeowners have lost more than $60 million in the past two years from these scams.

The firms are apparently posing as lawyers. However, there are some tell-tale signs that consumers can watch for to discern the difference between a real lawyer and a scam. Particularly, a lawyer should never make a promise or a guarantee. Attorneys can assess a case and offer an opinion on the outcome, but promising a specific amount of money is not permitted. Consumers who have questions about whether or not someone is a licensed attorney can check with the state bar association.

Homeowners who are struggling to negotiate with their bank should contact an independent attorney before they make a decision about joining a class action lawsuit. Each person’s situation is different, so it’s important to get honest legal advice from someone who knows the facts of your individual case.

Source: New York Times, “Avoiding Mortgage Relief Scams,” Vickie Elmer, April 19, 2012.