Loan Modification Firms Masquerading As Non-Profits?

In a story on loan modification scams, Minnesota Public Radio describes one way that some firms are using to circumvent state law prohibitions on collecting upfront fees:

• [I]n Minnesota, it's illegal for so-called foreclosure consultants to demand money in advance for a loan modification. But a loophole allows nonprofits to charge fees upfront. Officials say that loophole has allowed scammers to masquerade as nonprofits, and take money from unsuspecting homeowners.

For the story, see New scam threatens struggling homeowners.