There is help for people in danger of losing their homes to foreclosure, but there are also predators who promise help but instead aim to defraud owners of any equity they may have left in their properties, local housing counselors say.

Working with a housing counseling agency approved by HUD, the U.S. Department of Housing and Urban Development, is a key first step for owners who are falling behind on their mortgage payments. Many of these agencies are nonprofit and offer services for little or no cost. They work with owners to come up with repayment plans with lenders, refinance if that is appropriate and possible, or if necessary, sell the properties before losing them through foreclosure auction.

Fraudulent foreclosure advisers typically offer deals that sound too good to be true, including cash payments to homeowners, according to Janice Mowrey, of Acorn Housing in Providence, a HUD-approved counseling agency.

They also charge high fees to desperate homeowners. John Nimmo, of the Housing Network, a HUD-approved counseling agency affiliated with Rhode Island Housing, said he knows a homeowner who paid $1,500 to a so-called foreclosure adviser three days before a scheduled foreclosure auction, when there was virtually nothing that could be done to stop the process.

“They target the most vulnerable neighborhoods,” Mowrey said of the fraudulent foreclosure consultants. Beyond offering false hope and wasting a client’s time and money, “they have been known to actually steal a house out from someone,” she said.

In such a scam, the fraudulent adviser offers to take over mortgage payments and rent the house back to the owner, promising to “sign [the house] back over to you someday.” Owners have also been talked into deeding their properties to a third party with no provision to relieve them of their mortgage debt.

Often, these scam artists “have a title attorney working in cahoots with them,” and “as soon as you have signed over your home to them, they sell it to an innocent third party,” Mowrey said.

Fraudulent advisers typically “throw a lot of paper” at homeowners to confuse them, make false promises without backing them up in writing, and if a homeowner starts asking too many questions, they “dangle a cash payment” to help close the deal, she said.

Rhode Island does not license housing counselors, according to Nimmo. But there is no shortage of people who need help.

“On average, I see about eighteen to twenty people a week” who are at risk of foreclosure, Nimmo said. Two years ago, Nimmo saw 127 clients for foreclosure counseling during the entire year. But for the fiscal year that ended Sept. 30, 2006, he counseled 515 people at risk of foreclosure. “It’s changed drastically from just two years ago,” he said.

To deal with the growing number of clients, Nimmo does the initial session, which includes explaining the process, in a group setting. Then clients go home, assemble the needed paperwork, and meet with Nimmo for individual counseling.

Counselors say it is easiest to help clients stay in their homes if help is sought relatively early in the process, before they are too far behind in their mortgage payments. Owners shouldn’t ignore letters and phone calls from lenders, which will come as soon as a payment is missed. HUD advises owners to explain their situations to their lenders, stay in their homes, and contact a HUD-approved counseling agency. HUD offers toll-free numbers (800) 569-4287, or TDD (800) 877-8339 to help owners find an approved counseling agency that is close by.

“We try to save the house if it’s at all possible,” Nimmo said, because most clients want to avoid foreclosure and stay in their homes. But some loans are so untenable that this is impossible. Nimmo cited a recent example: a woman in her 30s with a monthly income under $1,000 was “talked into” buying a three-family house for $413,000; the payments were more than $3,000 a month. The apartments were not rented “because she didn’t know how to rent or be a landlord,” Nimmo said. In this situation, staying in the house was not an option.

The options for resolving a bad loan or unfortunate personal circumstances depend on many variables, including income, debt, credit history, the loan terms, and “how many times they’ve refinanced their loans.” Nimmo said counselors often help owners find any source of financial help, for instance, heating assistance during the winter, “that might be the thing they need to pay their mortgage on time.”

“People get into these bad loans; other people are refinancing over and over again, but they never know what they’re signing,” Nimmo said. “We’re becoming more like social workers than housing counselors.”