Q. I've seen advertisements by companies that say they can help me avoid foreclosure on my home. Are these reputable?

A. Because of the amount of money involved and because this involves your home, you'll want to do more homework than is usual to make a decision on this.

There are many people who sincerely want to help if you have financial problems. The Consumer Credit Counseling Service of Hawai'i is one, while if you are low- or moderate-income family you might check out Legal Aid Society of Hawai'i's counseling services.

Again, you need to investigate foreclosure-rescue offers carefully.

Recently the state Office of Consumer Protection won a case against a company that claimed it could help people avoid foreclosures if the homeowners deeded the property to it.

In return, the company, Pacific Isle Acquisitions LLC, was to pay off the delinquent mortgage loan amounts. The former owners could remain in the house as tenants as long as they paid rent that went toward the remaining mortgage loan balance.

The state alleged the scheme allowed the company to take over properties by paying only a delinquent mortgage loan amount and that it gained significant equity the prior owners had built up in the properties. In suing the company, the state said Pacific Isle used confusing and sometimes contradictory documents and was deceptive in dealing with clients.

The state won a judgment against the company and other defendants, requiring them to pay more than $200,000 of restitution to eight consumers.

Gov. Linda Lingle's administration has proposed legislation, the Prevention of Mortgage Rescue Fraud Act, that would make the above practice illegal. The legislation, House Bill 1332 and Senate Bill 1418, are pending before lawmakers.

The National Consumer Law Center (www.consumer law.org) has spotlighted some foreclosure scams in its 2005 report, "Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-Stripping Foreclosure 'Rescue' Scams."

It said there are three main types of scams. One of type is similar to the Pacific Isle case in that it involves deeding the property to a rescuer with the promise of being able to buy it back at a later date.

The National Law Center said people are sometimes told this needs to be done so that someone with a better credit rating can secure lower-cost financing that will prevent the foreclosure.

"But the terms of these deals are almost invariably so onerous that the buyback becomes impossible, the homeowner loses possession and the 'rescuers' walk off with all or most of the home's equity," the report said.

Another version of a faulty rescue comes in the supposed offer to provide help for a fee. In this scam the offer to provide valuable help turns out to be no deal at all.

These purported rescuers charge big fees to either do work the homeowner could have done on their own or fail to deliver on promises to represent them, the National Law Center reported.

Another type involves a bait-and-switch tactic in which the homeowners are told they are signing documents for a new loan when in fact they were surrendering ownership of the residence.

Do you have a question about personal finance, taxes or other money matters? Reach Akamai Money columnist Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com