October 1st, 2008 12:17 PM by Lehel Szucs
Advance Fees and Loan Modificat ion Services
If you are behind in your mor tgage payments, you may be contacted by individuals or companies that will offer to help you work out a loan modificat ion with your lender or provide other services to you in order to help you prevent a foreclosure on your home.
You must be very careful if you are asked to pay for any of these services in advance, whether in cash or by charging your credit card. First , California Civil Code Sect ion 2945, which regulates " foreclosure consultant s", forbids anyone, including a real estate licensee, from collect ing any advance fees for these types of services if a Not ice of Default has been recorded against your proper ty. If your lender has recorded a notice of default , do not pay an advance fee to anyone. There are non-profit agencies that can assist you without charging you a fee and real estate brokers who can represent you for a fee to be paid after they have completed their work. For information on non-profit housing counseling services, use the following links:
If a Notice of Default has not been recorded against your property, it may be permissible for a real estate broker to assist you in working out a loan modificat ion or otherwise negot iate a possible resolut ion to your problem with your lender or loan servicer and ask you for payment in advance for their services. However, the broker must have you sign an agreement that tells you what services will be per formed, when they will be per formed and how much you must pay. The broker cannot have you sign an agreement until it has been submit ted to the Depar tment of Real Estate for review and the broker has received permission to use it and collect the advance fee.
Before you pay an advance fee to anyone for assist ing you, first call the Depar tment of Real Estate at ( 9 1 6 ) 2 2 7 - 0 7 7 0 to find out if an advance fee agreement is on file.