Source: Attorney General Website
According to an LA Times post, Attorney General Jerry Brown is taking action against nearly 400 loan modification companies. He wants them to post $100,000 bonds and to register with his office. Additionally, nearly two dozen firms are told to substantiate their loan modification advertisements.
I have written quite a number of posts on the all the bad folks out there taking advantage of folks in difficult positions. One of the best resources I have found for help with loan modification is HOPE NOW. People need to realize that more times than not, loan modification can be done directly with the lender and does not require an expensive, or up front fee, loan modification company. In fact, some of these companies are headed by people that got us into the mortgage mess we are in today.
“We’re in the midst of an unprecedented series of scams and exploitation in our state,” California Atty. Gen. Jerry Brown said at a Los Angeles news conference Wednesday. “This is not some garden-variety problem. This is out of control. It’s huge.”
View of list of the unregistered loan modification companies. The companies have a 10 day warning period – letters ordering companies to register were sent last Friday with the 10 day warning period beginning on Monday.
Visit the Office of the Attorney General website Stop Loan Modification Fraud for more details.
“Too many homeowners are paying money in advance because they are desperate, and they’re coming up empty-handed because they are being scammed,” Brown said.
California Real Estate Commissioner Jeff Davi said the Department of Real Estate had received 1,067 reports of loan modification scams since October.
The complaints resulted in 317 legal actions taken against fraudulent businesses, he said.
5 Tips to avoid being scammed:
- Don’t pay up-front fees. Foreclosure consultants are prohibited by law from collectiong money before services are performed.
- Don’t ignore letters from you lender or loan servicer. Responding to those letters is your best bet for saving your house.
- Don’t transfer title or sell your house to a “foreclosure rescuer.” Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.
- Don’t pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.
- NEVER sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they disvoer they actually transferred ownership of their home to someone who is now trying to evict them.
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