For Rene Ruelas, the calls came faster than weeds sprouting in the yard of an empty house.
Foreclosure was looming for the Buena Park home that Ruelas shared with his wife, Rose, and four children. The longshore mechanic was headed into his fourth month without a paycheck because of a workers' compensation dispute as he recovered from his second knee surgery in a year. He was desperate.
"They made it seem so simple," he said of the telephone solicitations that began late last year. "They said they were given my information from the bank and that I just had to pay the money upfront and they'd do all the footwork."
Ruelas said he paid about $4,000 over five weeks to a company that never even contacted his lender to modify his home loan.
Now Ruelas and his family are on the cover of a DVD the Federal Trade Commission is sending out in an effort to curb the calls and mailers that have helped dupe hundreds of thousands of homeowners out of hundreds of millions of dollars.
The DVD -- along with a flurry of lawsuits -- was unveiled Wednesday as a part of Operation Loan Lies, a nationwide crackdown by federal, state and local authorities on those who prey on homeowners desperate for mortgage relief.
"At the moment, there are more scammers than there are government officials going after them," California Atty. Gen. Jerry Brown said at a news conference in downtown Los Angeles. "There are more of these rats coming out of these holes than we can stomp on, but we'll keep doing the best we can."
Although the announcement was made Wednesday, the operation has been underway for weeks, FTC Chairman Jon Leibowitz said.
So far, 189 lawsuits, cease-and-desist orders and other legal actions have been filed in 20 states as a result of Operation Loan Lies, officials said.
In Southern California, prosecutors have taken legal action against 14 companies and 21 people accused of running loan-modification scams that ripped off thousands of struggling homeowners looking to avoid foreclosure.
In documents filed in U.S. District Court in Los Angeles and Orange counties, Brown and the FTC alleged that the California firms charged $500 to $5,500 in upfront fees, often promising to get lenders to modify mortgages to make payments more affordable -- and never delivered.
