With 25% of Californian’s underwater – around 2,500,000 people- all needing loan modifications, nefarious loan modification facilitators have taken advantage of this increased demand by collecting advanced fees from the homeowner and then (for the most part – it does work out rarely) accomplish little to nothing in negotiations for a loan modification with the lender. In fact, the services performed by the facilitator can easily be obtained by the homeowner directly through the lender or non-profit housing counseling agency.
The California Department of Real Estate revoked a record breaking 672 licenses in relation to loan modification scams, up 50% from 2008. Additionally, 105 licensees have surrendered their licenses to the state are facing disciplinary action for accepting advanced fees.
Effective October 11, 2009, California Business and Profession code 10147.6 prohibits advance fees to be paid for any loan modification or loan forebearance service on a one-to-four unit residential loan even if the licensee received a “no objection” letter from the DRE previously granting them authority.
A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available at www.hud.gov.
*Source: “DRE Licenses Revoked in 2009 hit a reacord” by Connor P. Wallmark