NEW YORK (CNNMoney) -- The federal government is cracking down on scammers who target struggling homeowners looking to lower their monthly mortgage payments.
Hundreds of con artists have been taking advantage of victims through online advertisements on search engines Google (GOOG, Fortune 500), Bing and Yahoo! (YHOO, Fortune 500), promising to help homeowners modify their mortgages through the government-run program known as the Home Affordable Modification Program (or HAMP).
Last week, the agency that investigates fraud, waste and abuse in the government's Troubled Asset Relief Program, announced that it has shut down 85 scams that were advertising on Google. Then, on Monday, it announced it had halted another 125 shady advertisers on Yahoo and Microsoft's (MSFT, Fortune 500) Bing search engine.
"The first place many homeowners turn for help in lowering their mortgage is the Internet through online search engines, and that's precisely where they are being taken advantage of and targeted," said Christy Romero, Deputy Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
Ever since HAMP and other federal aid programs aimed at helping struggling homeowners were launched, scam artists have been finding ways to exploit them.
"SIGTARP is diligently working on every level to stop these frauds, to protect homeowners from being victimized, and to hold accountable criminals who defraud homeowners in connection with HAMP and other TARP programs," said Romero.
Google has since suspended relationships with 500 advertisers and agents linked to the online mortgage fraud scams that advertised on its search engine, according to the inspector general's office. Microsoft, which powers Bing and Yahoo's advertising searches in the U.S., cut off 400 advertisers this week.
A spokesman for Microsoft said the company "is committed to preventing fraud within its advertising network and online community and is working closely with the [SIGTARP] to help tackle the problem of fraudulent mortgage-modification advertising."
A Google spokesperson wasn't available for comment.
Both Microsoft and Google are also collaborating with the U.S. Department of the Treasury, focusing on identifying paid search advertisers who may mislead customers seeking mortgage assistance.
The search companies auction off prominent positions at the top of their search result pages that are linked to certain keywords or phrases. Advertisers bid to buy one of the top spots for a keyword or phrase like "foreclosure relief." They may also buy related terms, such as "mortgage modification," "foreclosure prevention," or "lower mortgage payments."
Many of the scam sites may suggest they have an affiliation with a government agency by using an official-sounding name or government-like seals or logos.
Once a consumer clicks on an advertising link on one of these sites, they may be victimized in a number of ways.
The most common type of scam involves asking homeowners for up-front fees in exchange for assistance with mortgage modifications that never come to pass.
Even worse, some scammers instruct homeowners to suspend their mortgage payments and cease all contact with their lenders, telling them to send the payments to the scammers instead. In some cases, they even get the homeowner to transfer over their property deeds and share sensitive financial information.
By the time these scams unravel, homeowners can lose thousands of dollars and be many more months behind in payments. At that point, they may find it impossible to catch up with their mortgage and retain their homes.
Homeowners should be wary of anyone who tells them to stop paying their mortgages or to cease all contact with their lenders, warned SIGTARP. The agency advises them to seek free help with HAMP mortgage modifications directly through their lenders or through a HUD-approved housing counselor.
Borrowers can call the Hope Hotline at 1-888-995-HOPE (4673) or go online to http://www.makinghomeaffordable.gov/pages/default.aspx. 
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