24 Nov 08 Loan Modification Services and Advance Fees
If you are behind in your home loan payments, you may be contacted by companies that may offer to help you with loan modifications and loan work-outs with your existing mortgage lender. There may be foreclosure prevention companies that provide other services to you in order to help you stop the foreclosure process on your home. Make sure that you work with a loan modification company that has a track record negotiating with lenders and if check their refund policy. 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”, prohibits anyone who is classified as 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. To collect money upfront, you must be a California attorney acting on behalf of your client to accept money up front.
If your mortgage lender has recorded a notice of default, we recommend that you not pay an advance fee to anyone. There are non-profit agencies that can assist you without charging you a fee and real estate brokers who can represent you for a fee to be paid after they have completed their work. 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. 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.
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Hello.
I have been reading online for months trying to find a way to keep our home from a foreclosure. At the same time in constant contact with my lender Home Loan Services or First Franklin trying to get help on my loan before it reset. I had never been late until this November when it adjusted. Mind you this current loan we were promised to get out of two years ago into a much lower payment. Months of requests including getting us approved for an FHA loan they told me to get so I could finally get a safe secure loan we could afford. After I was lead to believe it was a done deal they denied me. It was all for nothing, because that is what they have done so far…………..nothing. I will be 90 behind come the first of the year. I keep reading and hearing a lot of words for help, but please tell me where are the REAL actions to back them up? Or at the very least how to protect my family from these liars when they take my house back. Another family in California to become homeless, Catherine