Foreclosure scam artists rarely face jail time

But federal loan modification programs, as well as lender-designed programs, are complicated and time consuming. The Obama administration's new housing recovery plan aims to change this by standardizing the process for modifying loans and offering lenders financial incentives. Cooperation remains voluntary on the part of lenders.

Homeowners who have gotten mixed up with scammers are flooding Better Business Bureau chapters, state attorney generals and consumer protection offices with complaints. Bartholemy said his office in Charlotte, N.C., received about 1,700 last year, while the Bureau of Consumer Protection in Nevada takes in more than 100 a month.

The response from state prosecutors so far, according to a national Associated Press survey, has largely come on the civil side of the court docket. Florida Attorney General Bill McCollum has filed several civil lawsuits, including one against a company with an estimated 600 clients. So have attorneys general in at least a dozen states.

In Maryland, state criminal prosecutors have filed no charges under that state's new foreclosure rescue statute. Ditto in Massachusetts, which recently barred for-profit mortgage foreclosure rescues entirely.

"We found these cases are more appropriately brought in civil court, where we can get better remedies for the victims," said Amie Breton, a spokeswoman for Massachusetts Attorney General Martha Coakley.

Officials in North Carolina say just one person has been convicted since 2004 for such a crime.

In Alabama, the attorney general's office usually reaches out to the foreclosure relief firms first to find out if there is any money to recover before seeking criminal charges, said Rushing Payne, chief of the office's Consumer Protection Division.

"It depends on the nature (of the allegations) and what we're able to prove," Payne said, adding there had been no convictions for foreclosure rescue scams in the past year.

In several states, attorneys general can only bring a criminal case when asked by a local district attorney. In others, they lack the jurisdiction entirely.

"We set out to try to shut these companies down so they can't harm anyone else, and we try to get people's money back as much as we can," said Ben Wogsland, a spokesman for the Minnesota Attorney General.

There are some attorneys general making criminal cases. In Arizona, Attorney General Terry Goddard has brought three cases this year on felony theft, fraud or money laundering charges. Two defendants pleaded guilty, and the third case is pending.

In California, the attorney general's office busted a fraud ring last November that had collected upfront fees ranging from $1,500 to $5,000, stealing more than $700,000 from homeowners in all. Three people have pleaded guilty to grand theft charges and received sentences ranging from probation to 6 years in prison.

Lawmakers in Nevada, which has one of the highest rates of foreclosure rates in the country, took steps last fall to make foreclosure fraud a criminal offense. So far, five people have been charged under the new statute, none have yet gone to trial.

The new law there makes defrauding a homeowner in foreclosure a felony punishable by up to 20 years in prison and a $50,000 fine.

"I think the tide is turning," said John Kelleher, a deputy attorney general in Nevada. "A lot of these mortgage scams are so large scale and affect so many people, the judges are more willing to give prison time."

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