State Attorney General Andrew M. Cuomo announced Wednesday that his office has sent cease-and-desist letters telling 181 "mortgage rescue" companies to stop misleading customers and end any illegal activity.
The Attorney General's Office said that many of the companies are defrauding consumers by making unreasonable promises but providing no services.
"These companies spring up to prey on the trouble people have," Cuomo said. "It never ceases to amaze me."
As of last month, the state has had 64,778 foreclosures this year, including 6,000 in the Buffalo area, according to the Attorney General's Office.
Cuomo, a Democrat running for governor, took his message on an upstate tour Wednesday, speaking at 10:30 a.m. in Buffalo and in the afternoon in Rochester and Syracuse.
He urged consumers to avoid companies that ask for upfront fees, offer to make payments on the homeowners' behalf or advise homeowners to stop making payments.
Other warning signs include promises made in exchange for a home's deed and company names that suggest a government affiliation.
"This problem is getting worse, not better," Cuomo said. "New Yorkers are saying this is a serious situation."
Though Cuomo has yet to prosecute any mortgage rescue company, his office has sued several firms, obtaining settlements for some homeowners.
At Wednesday's news conference, David Carson, a laid-off Kodak employee from suburban Rochester, described being scammed by Fidelity National Legal Services when facing foreclosure on his house.
"What Fidelity did was wrong," Carson said. "They took advantage of me, stole my money and further hurt my credit rating."
"If you think you have been scammed," Cuomo said, "contact our office."
He directed New Yorkers to www.nyprotectyourhome.com, a Web site set up by his office.
He also warned residents that they need to look after their own interests.
"There is never a substitution for people informing themselves."
News Political Reporter Robert J. McCarthy contributed to this story.