OLYMPIA -- As the sub-prime mortgage market starts to go south, lawsuits against foreclosure-rescue "scams" look headed in the opposite direction.

Washington Attorney General Rob McKenna yesterday announced a settlement in a suit against three state businesses he alleged offered to save the homes of owners behind on their property taxes.

Instead, the suit charged, Fiscal Dynamics, Inc. and Cumulative LLC, of Tacoma; and Northwest Assets of Seattle, aimed to sell the properties at auction and collect proceeds that should have gone to the owner.

Under the settlement, over 100 property owners will receive a portion of $290,000 in reimbursement. The defendants will also pay $20,000 in legal costs.

McKenna charged that the defendants "exploited the public's unfamiliarity with the tax foreclosure process and profiting unfairly at the expense of desperate homeowners."

State suits against "foreclosure-rescue scams" are starting to spring up elsewhere as mortgage-foreclosure rates climb. A recent AP report noted that foreclosures rose 42 percent last year to 1.26 million, according to Irvine, Calif.-based RealtyTrac, which follows foreclosures.

Early this month Illinois Attorney General Lisa Madigan filed suit alleging that three Chicago businesses "scammed" tens of thousands of dollars each from 13 homeowners who were facing foreclosure.

Madigan alleges that Eyes Have Not Seen Inc.; Creative Financial Solutions; and Mutual Trust Funding offered to assist with mortgage payments and then persuaded owners to transfer the title to another name.

Homeowners lost $28,000-$85,000 at closing, Madigan's suit charges. The attorney general is seeking reimbursement for all homeowners and fines of up to $50,000 per violation.

"Mortgage-rescue-fraud artists, like these defendants, take advantage of homeowners who are in financial distress," Madigan said in a statement.

As well as monetary penalties, McKenna's settlement also bars the firms from 11 specific activities. This include conspiring to manipulate the sale price of property and obtaining lists of people heading for tax foreclosure.