You would think people with mortgage problems have enough trouble. But rogues in real estate always find new ways to inflict more.

Last year it was foreclosure rescue schemes that robbed desperate people of their homes. Now, it's loan-modification firms taking cash advances from struggling borrowers and disappearing.

Home Front has heard countless stories from struggling borrowers of phone calls offering to mediate with banks for $2,000 to $4,000 or more. Many are so desperate and confused they pay for what they can do themselves or get for free from nonprofit loan-counseling firms. Some say they have paid their advance fees, then can't reach the firm.

The California Department of Real Estate cites an "explosion" of for-profit loan-modification firms as the foreclosure crisis deepens. Former lenders and real estate agents have retooled, and jumped to the newest way to generate income.

"In some instances the licensees entered the business not appreciating or understanding what the rules were," said department spokesman Tom Pool. "You have another group that's just not licensed and looking to make a buck."

Last week, vendors passed out postcards for modification firms at a free Hope Now foreclosure-prevention workshop in Sacramento. State and Consumer Services Secretary Rosario Marin said solicitors always stalk such free events "and we boot them out."

Now, so many have complained of harassment and rip-offs that the state has issued a consumer alert and stepped up cease-and-desist orders.

Here is what borrowers should know when solicitors call, says the state Department of Real Estate:

• If your lender has issued a notice of default against you (after you have missed three or more monthly payments) do not pay an advance fee, even to someone with a real estate license.

• A lawyer is exempt from this and can charge up front.

• A fee paid to some licensed real estate professionals for loan modification is to be paid only after the work is done.

• Remember, too, nonprofit counseling firms such as Neighborworks, the Sacramento Home Loan Counseling Center, ByDesign Financial Services and Sacramento Mutual Housing Association will give the same help for free.

Circumstances are slightly different for those who are still current with payments, or haven't fallen far enough behind to get a notice of default. These borrowers can be charged an advance fee. But:

• The firm must have you sign an agreement saying what services will be performed, when they will be performed and what they will cost.

• Before you sign, the agreement must be submitted to the Department of Real Estate for review and permission to collect advance fees.

• To see a list of those brokers who have won permission to do these deals, visit this link: www.dre.ca.gov/mlb_adv_fees_list.html .

Pool said complaints should be directed to (916) 227-0864. More information, including online complaint forms are at: www.dre.ca.gov/mlb_adv_fees.html .

Repos dominate slowing sales

Winter has kicked in and has begun to slow down home sales for the year. The Sacramento Association of Realtors counted 1,716 escrow closings in November in Sacramento County and the city of West Sacramento, down 18.4 percent from October. But it's still more than double the 814 closings of November 2007.

Credit a continuing run on bank repos. They accounted for seven of every 10 sales of existing homes in SAR territory.

SAR estimates it would take 3.9 months to sell all the homes on the market at today's pace. That's down dramatically from 12.2 months the same month last year.

Mortgages still trending lower

Mortgage rates continue to be the good news amid real estate's turmoil. A 5.47 percent average for a 30-year fixed loan is the lowest since March 2004, mortgage giant Freddie Mac reported Thursday. A week ago rates averaged 5.53 percent.

Fifteen-year mortgages averaged 5.20 percent this week.

Low rates have brought a surge of refinancings, said the Mortgage Bankers Association. It reported this week that 73.7 percent of loan applications were to refinance an existing mortgage. For most of 2008 that number has stayed below 50 percent.

Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.