Thursday, July 23, 2009

Beware of Loan Modification Programs


The Department of Real Estate recently issued a fraud warning alerting consumers about loan modification scams and informing consumers of what they can do to protect themselves. The alert is available in both English and Spanish. Last July, the DRE had fewer than 10 complaints involving loan modification companies but today the department has 750 pending investigations. In addition, since last October, the DRE has filed more than 200 desist and refrain orders. A list of the companies and persons the DRE has filed an action against can be viewed at http://www.dre.ca.gov/cons_drs.asp.

It is worth noting that not all firms who collect advance fees for loan modifications services do so illegally the DRE said. In general, only licensed real estate brokers and attorneys operating within the scope of their license may collect advance fees. Real estate brokers must have their advance fee agreement reviewed by the DRE prior to its use to ensure it is compliant with real estate law.

C.A.R. advises members to carefully look at any program that may appear to have a government seal. C.A.R. is not aware of any government programs that have exclusive areas for which you have to pay to participate, and cautions all members to be on the alert for schemes seeking funds from Realtors or consumers with no value, or that may be misleading or unlawful.

The above information was provided by the California Association of Realtors web page.

My 2 Cents - Almost (but not really) unbelievable that there are so many people taking advantage of people who are already financially down but there it is. Check it out on line, with the DRE or with a trusted Realtor before you give away your financial information or money to someone you don't know. Use caution and common sense and get help from a trusted source.

1 comment:

Gretchen said...

Good information! And good of you to try to get the word out. So many people have contacted their lenders hoping for a loan modification, only to be turned down. I rarely hear of a loan being modified. However, an employee in the short sale department of Wells Fargo said that if you have been turned down for a loan modification several months or more in the past, it may be worth trying again because some of the guidelines have changed.