Virginia Attorney General Ken Cuccinelli has sued two Virginia Beach mortgage loan modification companies, claiming they charged consumers as much as $1,200 in advance for help to fend off foreclosures.

Under the state's foreclosure rescue law, a business can't charge a fee for its services until after completing the job, as long as the deal doesn't include the sale or transfer of residential property. The two lawsuits filed Monday in Virginia Beach Circuit Court claim Nationwide Loan Modification Bureau LLC and Real Estate Resolutions LLC charged fees of as much as $1,200 and $995 respectively before starting work. The suits seek refunds for consumers in cases for which services were not completely performed, and also seeks civil penalties of as much as $2,500 for each alleged violation.

"During these difficult times, the last thing people need is to be kicked when they are down," Cuccinelli said in a statement. Real Estate Resolutions could not be reached immediately for comment and an automated operator said the number for Nationwide Loan Modification Bureau was not in service.

Paying up-front fees is a "red flag" to avoid when looking for foreclosure prevention help, says the U.S. Federal Trade Commission. The agency recommends contacting your lender first to try to negotiate a new repayment schedule. But if that fails, the FTC says to stay away from businesses that:

• guarantee to stop the foreclosure regardless of the circumstances
• collect fees before providing services
• tell consumers not to contact lenders, lawyers or credit and housing counselors
• accept payment only by cashier's check or wire transfer
• instruct consumers to make mortgage payments to them, rather than the lenders
• tells customers to transfer the property deeds to them or offers to buy houses for cash at a price not set by the housing market
• offer to fill out the paperwork or put pressure on consumers to sign paperwork they haven't fully read or understand

Consumers facing foreclosure have other options before enlisting a foreclosure prevention company. Read about some of those on WalletPop.