Home Brokers in California: Fee Contracts No Longer Valid
Home brokers in California can no longer use the advance fee approval they have previously obtained from the California Department of Real Estate for providing paid loan modification services to customers. More importantly, they can no longer charge fees upfront before starting their loan modification services for clients.
Consequently, the form titled Advance Fee Agreement for Loan Modification Services can no longer be used.
So if you are a homeowner looking for a real estate professional, lawyer or foreclosure prevention firm to help you obtain loan modification from your lender, remember that you can no longer be charged advance fees.
Last October 11, the law prohibiting the collection of advance fees for loan forbearance or modification services covering one- to four-unit residential units was signed by Governor Arnold Schwarzenegger, and the law took effect immediately.
For those who have already signed loan modification contracts with a broker before October 11, the agreements are still valid, but you can no longer be charged for additional fees until the loan modification service is completed.
Just make sure that the broker you have hired is licensed in California and that he holds the No Objection letter issued by the Department of Real Estate before October 11. See to it also that he is providing you the services described in the contract.
You can check if your loan modification specialist has a No Objection document by going to dre.ca.gov/cons_adv_fees_list.asp.
For home brokers who have not yet been updated about the law and unknowingly collected advance fees after October 11, they must return the fees fully and immediately.
For homeowners who want to check foreclosure prevention or loan modification specialists that have pending cases or complaints against them or have been ordered by the DRE to stop providing loan modification services, they can go to dre.ca.gov/cons_drs.asp.
If you are being approached by brokers or lawyers offering or providing loan modification services but are charging you fees in advance because of purportedly special exemptions, report them to the Department of Real Estate, California Attorney General or California State Bar.
Homeowners are often lured into signing deceptive foreclosure prevention agreements because they are swayed by the knowledge of swindlers concerning their mortgages. But swindlers research foreclosure notices and other publicly available records to get information.
All in all, deal only with home brokers or lawyers who are licensed and well-recommended and whose backgrounds you have already checked.
