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homebroker@sbcgl
7369 Posts |
 Posted - 10/30/2009 : 11:13:51 AM
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What Loan Modification Companies Don't Want You To Hear
SB94 goes into effect on October 11, 2009
There are a lot of loan modification processing companies and law firms that are still performing loan modifications in the state of California. Some have claimed that they did their research with the DRE, law makers and their attorneys and have found a way around SB94.
This is what some companies are claiming is their way around SB94:
1.They revised their contracts and now accept funds upon completion of individual tasks.
2.They charge $3000 for 'Research and Analysis' and then do the 'Negotiation' for free.
3.They will perform a forensic loan analysis for a fee and do a loan modification for free.
4.They sell Do-It-Yourself Kits.
5.Any combination of the above
Here is the problem: THEY ARE ALL ILLEGAL!!
The Truth Behind SB94
No money may be collected before ALL work is completed for the modification and the client receives their modification from their lender.
If $1000 is collected, it is a felony.
Even if you are not performing loan modifications in CA but your processing company is, you are jeopardizing your clients and your business. If your processing company is caught, their business will be shut down - which in turn, will shut your business down. And the clients that they are processing will be left out in the cold.
The CA Attorney General, Jerry Brown, is now running for governor. He is on a political crusade to go after these companies who are still performing loan modifications for CA homeowners, shut them down and prosecute them.
What Can Be Done?
There are two options:
1. Stay out of California and do not allign your company with a processing company or law firm that still accepts CA clients.
2. Perform all work on the loan modification. Present the client with their modification results. Then try to collect your fee. *The problem with that is you will not get paid by the client.
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jestkikn
557 Posts |
Posted - 10/30/2009 : 3:46:19 PM
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Remember attorneys can sell individual services and charge at completion.
I see most attorneys now charging an hourly rate to review a file, no servicing only review which can be completetd in 2 hours.
It is CA brokers who cannot be paid until a modifiaction is delivered. |
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crankyusi
848 Posts |
Posted - 10/30/2009 : 4:07:32 PM
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quote:
Originally posted by jestkikn
attorneys can sell individual services and charge at completion.
I see most attorneys now charging an hourly rate to review a file, no servicing only review which can be completetd in 2 hours.
Interesting, have you reviewed that with the State Bar to verify compliance with SB 94? That "review" and "individual services" seem to be part of a larger package (why would a borrower only want a review?)which appears to also subject lawyers to the same collection format as RE brokers which is to complete each and every service......
“Notwithstanding any other provision of law, it shall be unlawful for any person who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower, to do any of the following: (1) Claim, demand, charge, collect, or receive any compensation until after the person has fully performed each and every service the person contracted to perform or represented that he or she would perform.”
http://calbar.ca.gov/calbar/pdfs/ethics/Ethics-SB94-FAQs.pdf |
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captaloans
21 Posts |
Posted - 11/03/2009 : 5:45:38 PM
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| That link isn't working Cranky, can you double check. |
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crankyusi
848 Posts |
Posted - 11/03/2009 : 7:28:06 PM
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hmmm, tried again, link still didn't work.
Guess you gotta go the long way around....first the following which is the home page.......
http://www.calbar.ca.gov/state/calbar/calbar_home.jsp
Then choose "SB 94 - Frequently Asked Questions
Read the State Bar's FAQs about recent state legislation dealing with attorneys and the collection of loan modification fees."
which is about one-third of the page down. |
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homebroker@sbcgl
7369 Posts |
Posted - 11/04/2009 : 07:16:11 AM
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That is exactly what our attorney told us, he stop offering the service as well. If you do an audit, or anything that would lead to a modification even if the clients do it themselves, no money up-front, PERIOD! Like you said why would they only want a consultation, what good is that going to do without leading into something else.
All options lead into a short sale or modification. To many attorney and brokers have had their licenses pulled over the last year and Atty General Brown is out for blood!
quote:
Originally posted by crankyusi
Interesting, have you reviewed that with the State Bar to verify compliance with SB 94? That "review" and "individual services" seem to be part of a larger package (why would a borrower only want a review?)which appears to also subject lawyers to the same collection format as RE brokers which is to complete each and every service......
“Notwithstanding any other provision of law, it shall be unlawful for any person who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower, to do any of the following: (1) Claim, demand, charge, collect, or receive any compensation until after the person has fully performed each and every service the person contracted to perform or represented that he or she would perform.”
http://calbar.ca.gov/calbar/pdfs/ethics/Ethics-SB94-FAQs.pdf
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velecico
5309 Posts |
Posted - 11/05/2009 : 1:36:56 PM
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Can you charge upfront to list a home for shortsale ? |
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crankyusi
848 Posts |
Posted - 11/06/2009 : 10:45:01 PM
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quote:
Originally posted by velecico
Can you charge upfront to list a home for shortsale ?
I'll venture a guess with a yes. The one I heard about is similar to a prepaid listing service. |
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MLCS
20 Posts |
Posted - 11/17/2009 : 07:55:39 AM
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Good Morning Brian,
It is not nice to completely plagiarize content that I have posted on Broker's Outpost previously without giving me credit. You even had my typos still. Please stop doing so..... |
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