With home foreclosures at an unprecedented and historic high, the National Consumers League (NCL), which has long tracked illegal scams through its Fraud Center, warns millions of consumers are more vulnerable than ever to mortgage fraud and bogus foreclosure rescue schemes.

As federal and state governments undertake a much-needed crackdown, NCL urges a renewed focus on consumer education to help consumers avoid falling victim to these criminals in the first place.

Mortgage fraud costs the lending industry an estimated $4-6 billion annually, according to the Prieston Group. At a time when consumer's pocketbooks are stretched thinner each day due the tight economy, homeowners are increasingly vulnerable to fraudsters offering them a way to avoid losing their homes.

Unfortunately, for tens of thousands of Americans, these schemes almost always end up with consumers losing money, having their credit further damaged, and losing their biggest investment: their homes.

"We welcome the recent actions by the federal and state governments to tackle the growing threat of mortgage fraud," said Sally Greenberg, NCL Executive Director. "However, vigorous enforcement actions — while a critical component of fighting fraud — must be combined with education to help consumers recognize and avoid these scams in the first place."

Mortgage modification and foreclosure rescue scams come in a variety of guises, but some of the common ones include:

• Upfront Fee Scam. Fraudster promises, for an upfront fee, to negotiate with homeowners bank to pay down back-payments, but scammer ultimately takes the money and disappears.

• Lease-back or repurchase scams. Con artists promise to pay a mortgage and lease it back to their victims if the consumer signs over the deed. The scammer then raises the rent, sells the house, steals equity, or even evicts the tenant.

• Refinance fraud. Victims sign over ownership of the house, thinking they are signing documents for a new loan at a lower payment level.

• Bankruptcy schemes. The scammer encourages the victims to stop paying their mortgage and offers to file bankruptcy for the consumer, for a fee.

• Appraisal fraud. An appraiser — in cahoots with a bank — overvalues the home, then secures an unnecessarily large loan at high interest rates for the homebuyer. Another scenario is that the appraiser undervalues the home in order to justify a short sale and subsequent re-sale at market value for profit.

"Recent multi-agency federal and state actions to tackle the threat of mortgage fraud are a positive step in helping to protect consumers," said Greenberg. "Fraudsters should be apprehended and brought to justice. All too often, however, victims of these schemes have already been ruined financially by the time mortgage fraud rings are broken up by law enforcement. Now, more than ever, enforcement should be tied to prevention by devoting more resources to educating consumers through churches, community centers, senior centers, schools, and libraries. This is needed particularly in vulnerable low-income, elderly, and immigrant communities, whose members are frequent targets for mortgage fraud."