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Here is a great article from Jay Greene at CNET News.

The scammers allegedly preyed on homeowners seeking to lower their mortgages through a program created by the Troubled Asset Relief Program, or TARP, created by the federal bailout in 2008. The TARP program, known as the Home Affordable Modification Program, offers homeowners who are having difficulty paying their mortgages a way to alter their payments to ease the burden.

In a press release today, the Treasury Department alleged that scammers charged those homeowners fees for lowering mortgage payments, something the companies never actually did. And the agency alleges that the companies lured victims with online ads placed using Google tools. Scammers targeted unsuspecting victims by buying key words from Google for search advertising.

In the mortgage case, scammers often sought up-front fees to assist with applying for the mortgage modification program, even though the program is free. The rogue companies also encouraged homeowners to stop paying their mortgage and to cease all contact with their lender. Then, they sought to get homeowners to send them mortgage payments, transfer property deeds and release sensitive personal financial information.

To appear more legitimate, the scammers often claimed to be affliated with the U.S. government, used a government seal on their sites, and sometimes adopted government agency-sounding names.

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