California Agencies Issue Alert on Loan Modification Scams

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By Consumers Union on Friday, October 19th, 2012

by Norma Garcia

 

Here is some good advice for homeowners considering a home loan modification.  The California Department of Corporations says you should beware of individuals contacting you to arrange a loan modification for a fee.  The practice of charging an advance fee to assist you in this manner has been against the law in California since 2009.

Before hiring anyone to help modify a loan, consumers should contact the Department of Real Estate at (877) DRE-4LIC or www.dre.ca.gov. To file a complaint against a mortgage loan modification consultant, consumers should contact the Attorney General’s Office, Public Inquiry Unit at (800) 952-5225 or www.oag.ca.gov.

To verify the license of someone servicing or negotiating terms of a mortgage loan, consumers should contact the Department of Corporations at (866) ASK-CORP or www.corp.ca.gov.

The full Consumer Alert may be viewed at http://www.corp.ca.gov/Consumer/pdf/AG_Mortgage_Foreclosure_Alert.pdf

This alert is very timely.  California Governor Jerry Brown recently signed Consumers Union supported legislation  [http://consumersunion.org/press_release/cu-urges-california-lawmakers-to-protect-homeowners-from-foreclosure-abuses] to expand provisions of the National Mortgage Settlement with five major banks to all lenders and servicers in the state of California.  The new law, known as the Homeowner Bill of Rights, prohibits lenders from dual tracking homeowners, in other words, proceeding with a foreclosure while the homeowner is being considered for a loan modification, requires a single point of contact (or a designated team of individuals) to be responsive to homeowners throughout the modification process, and requires more useful information to be given to homeowners going through the process, among other protections.  The law will go into effect on January 1, 2013.

Californians may experience an upsurge of telemarketing calls using the new Homeowner Bill of Rights as a pretense to contact homeowners.  Homeowners everywhere may receive similar calls offering assistance related to the National Mortgage Settlement.  The new rights and protections are genuine, but beware of anyone offering their services to you– for pay– in order to access these new rights or protections.  They may be trying to scam you.

 

For information about California’s Homeowner Bill of Rights, see http://www.oag.ca.gov/hbor

 

For more information go to the National Mortgage Settlement.

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