Minnesota Attorney General Lori Swanson filed lawsuits Wednesday against two out-of-state firms that she says are taking advantage of people in or near foreclosure who seek mortgage modifications.

Swanson said the firms represent a new tactic of "advance-fee" mortgage-modification cons that try to capitalize on negative publicity about such schemes by portraying themselves as good guys who can help protect homeowners.

In the past two years, Swanson's office has filed 19 lawsuits alleging mortgage-modification scams, but she said this is a new twist and she expects more lawsuits will follow.

"We continue to see them try to evolve, kind of like amoebas evolve their form," Swanson said.

The latest lawsuits were filed in Hennepin County District Court. One alleges that a Los Angeles law firm called the Balanced Legal Group and a California lawyer named Deepak S. Parwatikar offered mortgage modification services in Minnesota without being licensed to practice here, and they collected upfront fees of $3,500 or more from clients before performing any services. That's against the law, Swanson said.

The law group's website warns consumers to be wary of brokers and attorney-based firms working through boiler-room operations, but it also says distressed homeowners should use attorneys to deal with their lenders, who naturally have attorneys of their own. The suit says that Parwatikar was suspended from practicing law at one time for "dishonesty" with a client but was later reinstated.

A Brooklyn Park man hired the law firm and Parwatikar in January, the suit says, but the homeowner successfully negotiated his own trial loan modification with his lender in July.

Neither the law firm nor Parwatikar could be reached for comment.

The defendant in the other lawsuit is a Cheyenne, Wyo.-based firm called Home Protection Coalition, which did business under the name Housing Recovery Program. The suit says the firm claims to be a tax-exempt organization sponsored by the federal government to help struggling homeowners, but it isn't registered as a tax-exempt organization.

The firm allegedly copied the distinctive logo of a federal campaign called the "Loan Modification Scam Alert," simply deleting the word "scam" from the logo. "It's the same, just sans the word scam, so that's very, very ironic," Swanson said.

The firm claims its services are free of charge, but, in fact, it solicits a "donation" of $2,300 before working with clients, the suit says.

A Brooklyn Park couple fell prey to the firm's solicitations in January when they fell behind on their mortgage, the suit says. They said they were told to stop making payments on their mortgage and to let the firm deal with their lender, which ultimately denied their loan modification request. Because they stopped making payments, the suit says, they were so far behind they couldn't catch up.

Calls to a number listed on the firm's letterhead were referred to the Debt Settlement Law Group in Tampa, Fla. Tim Williams, who identified himself as the office manager, said the firm handles debt negotiations for companies and residential cases only for "our friends" and only in Florida.

Williams said the law firm had used Home Protection Coalition until a couple of months ago to process payments. "But they didn't do any mortgage work," he said.

Later, he called back and said he was told by a former employee of the Wyoming firm that "she's been out of work with them since February. That's probably why we couldn't get good service out of them for our processing, but it doesn't explain the modification thing."

Dan Browning • 612-673-4493