Government officials say scammers are seeking to take advantage of borrowers in danger of default by charging them upfront fees of up to to US$3,000 (S$4,500) for help with loan modifications that rarely, if ever, pay off.

The frauds often involve companies with official-sounding names designed to make borrowers think they are using the Obama administration's efforts to help modify or refinance mortgages.

Officials say such operations almost always are fraudulent, and that help is available for free from government-approved housing counselors.

'These predatory scams callously rob Americans of their savings and potentially their homes,' Treasury Secretary Timothy Geithner said.

'We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar.'

The Federal Trade Commission (FTC) has sent warning letters to 71 companies it says were running suspicious advertisements.

The agency also said it filed three new complaints.

Attorney General Eric Holder says the FBI is investigating about 2,100 mortgage fraud cases, a 400 per cent increase from five years ago.

'If you discriminate against borrowers or prey on vulnerable homeowners with fraudulent mortgage schemes, we will find you, and we will punish you,' Mr Holder said.

Over the past year homeowners have been flooding state attorneys general with complaints about for-profit loan modification consultants. -- AP