Consumer Alert

With many homeowners struggling in todays economy there are a number of unscrupulous "cottage" industries popping up. I received this alert today from a lender I work with and wanted to pass it along. If you are struggling, your real estate professional should be able to help you with your lender interactions at NO CHARGE. Not all agents will agree with me on this, it is part of my business practice, agents are not required to offer modification services. If there is a charge make sure and get everything in writing before the Realtor begins any kind of correspondence on your behalf. Check out the following Consumer Alert:



Consumer Alert - Advance Fees and Loan Modification Services
If you are behind in your mortgage payments, you may be contacted by individuals or companies that will offer to help you work out a loan modification with your lender or provide other services to you in order to help you prevent a foreclosure on your home.
You must be very careful if you are asked to pay for any of these services in advance, whether in cash, check or by charging your credit card. First, California Civil Code Section 2945, which regulates "foreclosure consultants", forbids anyone who falls under the definition of a “foreclosure consultant”, as well as a real estate licensee, from collecting any advance fees for these types of services if a Notice of Default has been recorded against your property. If your lender has recorded a notice of default, do not pay an advance fee to a real estate licensee, or to any person or entity. California licensed lawyers when rendering services in the course of their legal practice(s) are exempt from this prohibition. There are non-profit agencies that can assist you without charging you a fee and real estate licensees who can represent you for a fee to be paid after they have completed their work. For information on non-profit housing counseling services, use the following links:
Federal Housing Administration
Hope Alliance Web site
If a Notice of Default has not been recorded against your property, it may be permissible for a real estate broker to assist you in working out a loan modification or otherwise negotiate a possible resolution to your problem with your lender or loan servicer and ask you for payment in advance for their services. However, the broker must have you sign an agreement that tells you what services will be performed, when they will be performed and how much you must pay. The broker cannot have you sign an agreement until it has been submitted to the Department of Real Estate for review and the broker has received permission to use it and collect the advance fee.
The following individual and corporate real estate brokers have submitted advance fee agreements for loan modification and/or similar services to the Department of Real Estate for review, and have received “no objection” letters regarding their use. You can obtain information on brokers and their locations by clicking on the “License Number” on the listing below or call (916) 227-0770.
Advance Fee Agreement Listing
The Department of Real Estate does not approve, endorse, recommend or make any representations about any of the agreements or their terms, or any aspect of a licensee’s business activities. Consumers wishing to contract with a real estate broker for loan modification or any other similar or related services should carefully review the agreement(s) and consider obtaining independent advice before signing an agreement(s) or advancing any fees. Consumers should also consider comparing the services and fees offered by other licensed brokers on the list.
Note: Licensed real estate brokers who provide loan modification or similar services without collecting fees in advance are not required to receive the Department of Real Estate’s permission as long as their services are fully completed before you pay them.
The list is updated on a periodic basis and may not include those which have recently completed the review process.