WASHINGTON -- In an effort to push people away from foreclosure scams, the Federal Reserve has commissioned a 30-second commercial to be shown in the nine states with the highest incidence of home foreclosures.

The commercial will air April 10 through 17 in 18 movie theaters in California, Nevada, Michigan, Ohio, Florida, Arizona, Georgia, Maryland and Virginia. Many are multiplex theaters, and the commercial will run on all screens. So in addition to movie previews and the plea for moviegoers to turn off their cell phones, people will be warned to avoid outfits that will take advantage of them if they are having trouble making their mortgage payments.

The take-away tagline for the crisp, slick ad says: "It shouldn't hurt to get help!" In the voice-over, troubled homeowners are encouraged to go to www.federalreserve.gov and click on the link "Five Tips for Avoiding Foreclosure Scams."

The Fed isn't alone in trying to stomp out these schemes multiplying like cockroaches as the housing crisis worsens. There is a federal and state-led posse trying to round up the scoundrels ripping off homeowners at their most vulnerable time.

The Federal Trade Commission, along with the Departments of Treasury, Justice, and Housing and Urban Development (HUD), announced joint efforts to coordinate and aggressively go after mortgage modification and home foreclosure rescue companies.

"For millions of Americans, the dream of homeownership has become a nightmare because of the unscrupulous actions of individuals and companies who exploit the misfortune of others," Attorney General Eric Holder said in a release. "The Department of Justice's message is simple: If you discriminate against borrowers or prey on vulnerable homeowners with fraudulent mortgage schemes, we will find you, and we will punish you."

After reviewing online and print advertisements nationwide, the FTC sent warning letters to 71 companies who may be deceptively marketing mortgage services.

In the last year, the FTC said it has brought 11 law enforcement actions against operations the agency said was conning consumers. There has also been plenty of state action in running down companies engaged in fraudulent activity. Illinois Attorney General Lisa Madigan filed two lawsuits recently against Chicago-area mortgage rescue fraud schemes.

"We have repeatedly found that these operations are swindling desperate homeowners out of money they can't afford to lose," Madigan said in a release.

Typically this is how a foreclosure scam works. A company will "guarantee" it can stop a foreclosure or help a homeowner, through a mortgage modification, get a better interest rate or reduce his or her monthly payment. To snare its prey, the company may use a copycat name or look-alike Web site to appear to be government-sponsored or a nonprofit, according to the FTC.

In a panic, victims pony up an upfront fee usually ranging from $1,000 to $3,000. But after collecting the money, the company does little if anything to assist the homeowner. Continued...