Homeowners can lose not only their money but also their houses if they fall for a "home improvement" loan scam, consumer advocates warn.

The scam targets those who don't understand the home mortgage lending process or who think they can get something -- a new roof or kitchen -- for just about nothing, meaning less than what they are currently paying in mortgage payments.

Here is the scenario, according to the Federal Trade Commission:

A contractor drops off fliers, calls or knocks on the door and offers to install a new roof or remodel the kitchen at a price that sounds reasonable.

You tell him you are interested, but cannot afford it. He tells you that is no problem -- he can arrange financing through a lender he knows.

You agree to the project, and the contractor begins work. At some point, you are asked to sign a lot of papers. The papers may be blank or the lender may rush you to sign before you have time to read. You sign.

Later, you realize that the papers are a home equity loan and the interest rate, points and fees seem too high. To make matters worse, the work on your home is not done right or has not been completed, and the contractor, who may have been paid by the lender, has little interest in completing the job to your satisfaction.

To protect against lending scams, FTC says:

* Don't agree to a home equity loan if you don't have enough money to make the monthly payments.

* Don't sign any document you haven't read or any document that has blank spaces to be filled in after you sign.

* Don't let anyone pressure you into signing any document.

* Don't deed your property to anyone. First consult a lawyer, a knowledgeable family member or someone else you trust.

* Don't agree to financing through your contractor without shopping around and comparing loan terms.