The current state of the financial crisis is hitting homes. Homeowners are under grave stress as they face the prospect of losing their homes. They are vulnerable and desperate to do just about anything to save their homes – making them more susceptible to fraud.
Many homeowners are turning to loan consultants to assist them with loan modification process under the false impression that their homes can be saved from being foreclosed.
To protect themselves from mortgage and foreclosure scams, the homeowners must understand that the collection of advance fees is generally restricted or prohibited with some exceptions for possible payments in advance to lawyers for legal services. The homeowners should know that they themselves can contact the lender and discuss the loan terms.
Further, loan modification companies regulated by the Department of Real Estate (DRE) not only must have their advance fee contracts for loan modification reviewed by the DRE but they must also hold the advanced fees in a trust account until the services promised are delivered. Any unearned fees must be refunded to the homeowners.
Before hiring someone to assist with the loan modification, homeowners should check the list compiled by the DRE of persons and/or entities accused of fraudulent loan modification activities: www.dre.ca.gov/cons_drs.asp.
Dominique N. Thieu, Esq.