California law now prohibits anyone, including real estate agents and attorneys, from demanding or collecting an advance fee from a consumer for loan modification services. Effective immediately, Senate Bill 94 prohibits any attorney or real estate licensee from demanding or collecting advance fees – money upfront – from a consumer for loan modification of mortgage loan forbearance services affecting 1– 4 unit residential dwellings.
It’s About Time!
I say…it’s about time – we have seen a wave of charlatans and scammers preying on the public since this mortgage debacle surfaced. There seems to be so many people who claim to have the magic bullet for solving a homeowner’s financial problems. They come to town displaying fancy power point presentations and a load of plausible sound bites supporting their programs. They are really slick.
Proprietary Information that Will Force Your Lender to Accept Your Loan Mod?
They claim to have spent thousands of dollars on legal advice designing their programs. They claim to have California Department of Real Estate (DRE) approval. They claim to possess proprietary information that will force your lender to accept your loan modification proposal. They claim their attorneys will scare lenders with the threat of a lawsuit for RESPA violations. They claim lenders will do anything to avoid foreclosure and you have a great case. You may have a great case…their attorneys will defend you to your very last dime.
Loan Mod Scammers Didn’t Just Prey on Consumers
They also prey on real estate agents – many of whom should not be in the business – looking for another source of business since the downturn. Real estate agents are just as susceptible to a compelling presentation as any other member of the public. Many agents are suffering because the volume of business has declined – in many California markets – dramatically over the past 24 months. These “loan modifications scammers” claim they are just selling information and are not guaranteeing results will be similar to the anecdotal stories in their presentations. Of course, they charge thousands of dollars for the real “insider’s secrets.”
To Find Out Who is Being Investigated, Contact the Dept of Real Estate
If you would like to learn the names of at least some of the scammers being investigated, contact the California Department of Real Estate. And, tell your friends.
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Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.