Homeowners seeking a mortgage modification could benefit from a new Federal Trade Commission rule that aims to thwart scammers who promise to help.

The Mortgage Assistance Relief Services Rule, which went into effect Wednesday, prohibits companies from making false promises about loan modification services they provide. It also requires companies to disclose that they aren't affiliated with or endorsed by the government or the homeowner's lender, to point out that the lender may not cooperate with a modification and to explain the negative consequences of stopping loan payments.

"Peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of homeowners without ever delivering results," FTC Chairman Jon Leibowitz said in a statement. "This rule will protect consumers from being victimized by these scams."

Beginning Jan. 31, a final piece of the rule will go into effect that prevents companies from charging upfront fees for modification assistance. A similar law has been on the books in Minnesota since 2009, and state Attorney General Lori Swanson used it to sue a handful of companies this year.

However, attorneys are generally exempt from both the FTC and state measures, leaving a pathway for unscrupulous lawyers to take advantage of struggling homeowners.

Ed Nelson, spokesman for the Minnesota Homeownership Center, said counselors in the center's network "easily" see dozens of homeowners weekly who have worked with a for-profit company and not received a mortgage modification. Many people are unaware that there is free help from nonprofit housing counselors available to Minnesotans of all income levels.

To get the word out about free statewide counseling and to teach people how to spot foreclosure-related scams, Minnesota joined Look Before you Leap, a nationwide watchdog campaign, this summer. Currently, 100 state nonprofits, banks and other organizations are part of the effort, which was recently extended in Minnesota through the first quarter of the year.

For more information about foreclosure counseling, visit www.hocmn.org or www. lookbeforeyouleap.org.

Kara McGuire • 612-673-7293