Looming foreclosure can be one of the scariest times for any family down on its luck. So, it stands to reason that crooks would design scams to target that vulnerability and try to squeeze whatever money these people who can’t pay their bills can scrape up.

The state of California has issued a warning about a scam that involves getting these vulnerable homeowners to pay fees up front with the idea of winning a lawsuit that will get them their homes free and clear. The cost to participate in this heavily marketed scam is $5,000.

The scam is particular elaborate since a federal ban went into effect earlier this year against requiring up-front payments to those offering mortgage relief. Rules being what they are, there is an exception to it — for lawyers. While the terms are a bit more specific than that, it opened the door to people supposedly working on behalf of lawyers to still preying on those whose homes are being foreclosed.

“Those who continue to prey on and victimize vulnerable homeowners have not given up,” the warning by Wayne S. Bell, chief counsel of the California Department of Real Estate, says. “They just change their tactics and modify their sales pitches to keep taking advantage of those who are desperate to save their homes. And some of the frauds seeking to rip off desperate homeowners are trying to use the lawyer exemption above to collect advance fees for mortgage assistance relief litigation.”

Those running the scam are making claims across the country, using the web as their vehicle in many instance, to try to sell these folks on the idea they will not only not lose their home to the bank, they’ll win full ownership.

The scammers try to convince their targets that they will be participating in a “mass joinder” or class-action lawsuit. Here are a few of the claims being made that were highlighted by California officials:

* If you join in the suit, you can remain in your home and stop paying your mortgage.

* When the lawsuit is filed, your obligation to the bank ends.

* Lawyers are “turning the tables on lenders and getting cash settlements for homeowners”.
Some of the claims are more or less grandiose, but similar, and always dangling the idea of not just any victory — but an overwhelming one.

Officials pointed out that the issue is clouded by the idea that there are, indeed, real lawsuits going on. So, the issue is warning consumers to beware when unrealistic claims being made, guarantees are proffered and when money is sought in advance.

The firm of Kramer & Kaslow, is involved a complex case alleging widespread fraud by lenders, has been used on dozens of websites and by still more mailings to lend legitimacy to the get-rich-quick notions being sold.

The firm has posted cease and desist letters sent to numerous entities trying to get vulnerable homeowners’ buy-in.

Before signing up to be part of any lawsuit like this, consider the following:

* Lawsuits take a long time to resolve and even victory can be drawn out over appeals. That means promises of speedy resolution are hollow.

* Filing a lawsuit will not automatically stop a foreclosure proceeding and end your obligation to a mortgage holder.

* Be extremely skeptical of anyone reaching out to you marketing legal services – no matter how good their spin – particularly when they are asking for money in exchange. Class action lawsuits don’t require up-front payments by litigants. Rather, settlements or victory, whenever that might come, yields a share to those in the affected class.