Less than one week after the Minnesota Department of Commerce charged a Michigan company for allegedly scamming 118 Minnesota homeowners out of nearly $290,000, yet another mortgage lender is facing accusations of fraud.

Minnesota Attorney General Lori Swanson on Monday filed a lawsuit accusing Meredian Financial Corporation of convincing Minnesota consumers to pay for mortgage refinancing services that were never performed.

Costa Mesa, California-based Meredian is accused of contacting Minnesotans and falsely stating that the call was from the person's mortgage lender. The company then persuaded consumers to pay a fee in exchange for refinancing services. Meredian allegedly convinced consumers by offering too-good-to-be-true terms, often stating that there would be no costs associated with the refinancing-which the company ensured is guaranteed and didn't require approval-save for a one-time fee equal to the customer's mortgage payment.

The fees typically range from $900 to $4,000, and in total, Minnesotans have lost “hundreds of thousands of dollars” as a result of the scam, according to the suit, which was filed in Hennepin County District Court.

Once victims of the fraud have paid the “lock-in” fee for the promised refinancing services, Meredian “generally ceases contact with the consumer and avoids their attempts at communication,” according to the suit.

Swanson alleges that out of more than 500 Minnesota consumers who paid Meredian for refinancing services, only 17-roughly 3 percent-actually received the services.

The suit seeks unspecified restitution for victims, as well as civil penalties.

Meredian's Web site appeared to be offline on Tuesday morning, but media reports indicate that calls made to the company were not immediately returned.

The lawsuit explains that the recession has led to record-low interest rates, which, coupled with unemployment and declining family incomes, have set the stage for mortgage fraud scams like Meredian's.

“Meredian targeted homeowners struggling in the troubled economy who were looking to get out of an adjustable rate mortgage or lower their interest rate by refinancing,” Swanson said in a statement. “The company masqueraded as the homeowner's current lender and convinced them to pay thousands of dollars in fees, but left homeowners with the short end of the stick.”

Swanson on Monday also issued an alert to Minnesotans, encouraging them to research companies that claim to offer mortgage services, favor written agreements rather than rely on verbal arrangements, shop around for the best loan, and not be pressured into acting too quickly. Homeowners who believe they've been victimized by a mortgage scam should contact the Attorney General's Office.

Mortgage fraud schemes seem to have flourished amid the struggling housing market.

Last year, the Minnesota Department of Commerce charged three companies-two from Minnesota and one from out of state-for deceptive lending practices.

And last week, two area brothers pleaded guilty to orchestrating a $4 million mortgage fraud scheme that defrauded 24 local lenders.