Posted by 101livescan on 10/6/12 1:17pm
Msg #437428

For New Members of this Forum

Notaries have contacted the CA AG's offices about attempts by dishonest loan modification companies to hire them under false pretenses in order to make mortgage scams look legitimate. The scammers typically hire Signing Agents to collect advanced fees from customers for loan modifications or to notarize “loan assistance documents” and then take the documents away from a signer without leaving any copies.

Notaries should avoid any job offers that require collecting an advance fee for loan modification services from a customer — this practice is banned in several states including California.

If you are contacted by an attorney, law firm or other business that offers “loan modification” assignments involving advanced fee collection or any other suspicious or unusual requests, refuse any such offers and contact local law enforcement or your state Attorney General’s office to report it.

Only the lender can modify loans, and most don't really want to. Many modifications of loans done 4 years ago are now failing. Home values are lower than they were four years ago, and the interest rate which was modified at 2% gradually getting to 5% are now in default again.

The same for credit repair/debt consolidation companies. They are requesting notaries to go out and collect money and signatures on agreements. The only way to have good credit is to keep it good, debt consolidation will ding client's credit scores, freeze all debt, lines of credit, etc., while adding to the debt. People can clean up their own credit, without incurring the upfront $2-$5K fee. The deb consolidation company takes all their money up front, then pays minimum payments to debtors. It will take forever to reduce the debt.

Sometimes BK is a good thing, if the debt is unsurmountable.

There is plenty of solid, legitimate general notary work when the interest rates start to climb again and loan signing business dwindles in the years ahead.

Have an awesome weekend, beautiful weather on the Central Coast.

Reply by sueharke on 10/6/12 1:29pm
Msg #437429

I am speaking not as a notary in post but a CPA. I agree with everything you wrote. I see people in trouble and suggest ways to resolve debt without being scammed by a loser who wants to separate people from their money. I tell people my mentors of the information I give is my own life experience and education, Suze Orman, and Clark Howard (the last two are well known financial TV, radio, and book writers of financial and how to save money--the two do not always agree with each other on some points).

I do have tax clients who are financially in trouble and ready to hear how to work with the correct, legitimate representative that will help determine if he or she can help get them out of debt or is bankruptcy the best approach. It is amazing how many people have never hear of budgeting or know what a budget is.

101Livescan, keep saying what you're saying. Maybe if enough voices on this forum say the same it will push him or her over the line to get the best help to resolve the issue.

Reply by JanetK_CA on 10/6/12 2:10pm
Msg #437430

Does anyone know if the non-profit Consumer Credit Counselors (CCC) is still around? A company I worked eons ago had them as a client, but a quick Google search just now led me to some sites that claimed to be non-profit, but it's hard to tell.

They used to offer free counseling, budget planning, etc. and were a sensible, credible option for people in financial distress. Most importantly, there was no charge or hidden gotchas. I was hoping to provide a link, but I don't want to risk getting the wrong one. The scammers are very good at deceptive advertising - including websites. Also, it's possible they're not around anymore. That would truly be a shame, in the current economy...

Reply by NVLSlady/VA on 10/6/12 5:28pm
Msg #437437

Financial illiteracy is a Huge problem. I worked in a credit environment for many years and saw/heard much to make you sit up and think. I read a letter once where the customer contested a loan denial, saying she (or he, been so long) had "no debt." It had been "wiped out in Bankruptcy!!"

I'm no expert on finances, but there are pitfalls that people must absolutely avoid: 1. Up-front fees for such budgetary "help" as "fixing credit"; 2. Co-signed loans (Don't co-sign loans for ANYONE; if you can afford it, loan them the money)

There is an "ancient" banking rule - the 28/36 - which is a guide to how we should conduct our financial lives: Spend up to 28% of gross income on Housing/ No More Than 36% should be spent on Combined Debt (A lot of lenders "forgot" or ignored this a few years ago). One's Income should determine his/her spending habits, not wants, desires Or the lifestyles of others.

It's a conservative formula and difficult to live by - especially in these times of financial trouble.
There are tons of financial literacy programs out there - including Credit Abuse Resistance Education (CARE) - founded by a ret. Bankruptcy Judge in NY.

I'd really like to see more finance professionals (including notaries) take part in financial outreach programs, sharing their unique knowledge/experiences with students. That's CARE's mission: to provide lessons, tactics and techniques young people need to help them lead a financially responsible, consumer debt-free life.

They key is starting Early, BEFORE the trouble begins . . . because, as the experienced people on the forum said: The ONLY one who can fix your credit is YOU; Pay the debt, satisfy judgments, liens, collections, etc. and your FICO WILL rise (:

Thanks, Cheryl for starting this post (very necessary).

Reply by GOLDGIRL/CA on 10/6/12 5:32pm
Msg #437438

Janet, I've heard of Take Charge America Inc. (www.takechargeamerica.org). A relative of mine went to them for debt counseling. They put her on a budget, then she pays them to pay off her debts (slowly but surely). I can't vouch for them personally but it appears to be working for her. And their Web site says it's free.

Reply by JanetK_CA on 10/6/12 7:03pm
Msg #437441

Thanks. I was just curious, but good to know in case we ever get asked, or for anyone looking. Thankfully, I'm not. I've always kept within the 28% rule for housing costs and I pay my credit cards in full every month. However, I think those financial advisers need to modify that rule to include health insurance, although that's an item we sometimes can't control.

For example, in the past 10 years, my health insurance premiums (with high deductibles and copays) have gone up more than 300%. For me, that payment is now more than my mortgage, condo insurance and property taxes - combined. This is because of a "pre-existing condition" - even though I've been pretty healthy for 11 years - so I can't change my coverage. I've tried. The only way I have any health insurance at all, is because I've maintained continuous coverage. Private health insurance is currently full of exclusions and restrictions and can be very difficult to qualify for.

I just mention this as a heads up for future planning purposes, especially for anyone considering switching to full time in this business. Unless you have a spouse who has a group plan, health insurance can be a shocker - and regardless of how healthy you are now, you never know when you might need it. (Anything more I have to say on that subject belongs on a different page... )

It's just one more very important thing to factor in when setting fees and very relevant for new forum members, imo.

Reply by sueharke on 10/6/12 8:23pm
Msg #437451

Go to the website "http://www.nfcc.com". This is an organization of legit credit counselors. Find a few and interview him or her to find the person who will work best for you. CCC may also be on that website too. Good luck.

Reply by Pro Mobile Notary on 10/6/12 7:50pm
Msg #437447

Let me be as clear and as straightforward as I can with this post.

IF YOU TAKE ONE OF THESE ASSIGNMENTS AND ASK ANY BORROWER IN CA FOR A CHECK UP FRONT WITH THEIR LOAN MOD APPOINTMENT YOU RISK GOING TO JAIL!!!!

I cannot emphasize enough how accurate my statement is.

It is against the law in CA to ask for a single dime in up front fees for a loan modification. If the loan mod company asks yoU to accept this assignment and YOU perform this task you could wind up in the hotel with bars on the windows.

Reply by Karla/OR on 10/6/12 10:36pm
Msg #437459

Just curious, do the free credit counseling people get the debt companies to stop calling the debtors home and harassing them? Are they able to negotiate a lesser amount that can be paid off sooner?

Reply by sueharke on 10/6/12 11:08pm
Msg #437464

Contact me privately for more information on your question. I may know an internet resource that may answer your question.

Reply by CJ on 10/7/12 2:23am
Msg #437483

Thank you for posting this information.

I was unaware that collecting money up front for a loan mod was illegal. I have been sent on "loan Modification" jobs, only to find out it is an attorney asking for up-front money to negotiate with the bank, and making NO guarentees. So far, NONE of those borrowers signed. I had no idea it was illegal, but I sure didn't like what I read in the documents. I would let the borrower take all the time they wanted to read the docs, hoping they would feel the same way, and they always said,"I don't feel good about this. I'm not signing". Whew! Now that I know this is illegal, I will tell the SS up front when they ask me to do these attorney loan mods. Thanks again for posting this!

Reply by Karla/OR on 10/7/12 3:03am
Msg #437484

Just clarifying my post above: I personally am not looking for debt resolution - I was just being a bit cynical.

Reply by ReneeK_MI on 10/7/12 6:07am
Msg #437490

Important to note the exemption for Attorneys

Attorneys who meet the 4 conditions CAN collect money upfront. Rule is here:

http://www.ftc.gov/opa/2010/11/mars.shtm

Reply by Linda_H/FL on 10/7/12 7:02am
Msg #437492

hrrmmm..

"they must place any fees they collect in a client trust account and abide by state laws and regulations covering such accounts.

Reply by Linda_H/FL on 10/7/12 7:05am
Msg #437493

Re: hrrmmm..sorry..wrong button

"they must place any fees they collect in a client trust account and abide by state laws and regulations covering such accounts."

So much for "Attorney Retainer Agreements" which I've been asked to do - no attorney is going to put his FEE in trust and wait for it pending the outcome of a modification.

I always did wonder why companies bother to send us out on these anyway - they don't require notarization, and if they want to get the process rolling quickly, why not just send it directly to the borrower and tell them to sign it, take it to their local pack-n-ship and have it faxed back to them asap.

Thanks for the link Renee.

Reply by ReneeK_MI on 10/7/12 7:44am
Msg #437494

My take on why they use notaries ...

same reason they contract NSA's to do loan app signings - to create a sense of 'official' engagement with the signer. IMO, it's an exploitation of both the signer and the NSA.

Reply by sueharke on 10/7/12 11:30am
Msg #437512

Re: hrrmmm..

I don't do debt resolution, I help people with tax issues with the IRS or Franchise Tax Board in California. I do ask for advance payment up front in many cases because of the complexity of the issues. Resolving issues with taxing agencies can take a long time in some cases (up to 1.5 years). With the change of IRS employees and the retirement of experienced agents (this is especially true with the CA Franchise Tax Board and Board of Equalization), the IRS makes a lot of mistakes (also computer program issues) and appealing to the right department takes more time. Hint to notaries: use this information to make your life easier knowing what information to use to prepare your tax return to avoid issues that the inexperienced agents don't know how to handle. Don't get greedy, even if it means paying a bit more in taxes.

When I have a power-of-attorney, I tell the clients if the IRS calls them to call the CPA. Is there a way we can do this to the TC and LO (especially to a LO in training)?

Reply by Gerry Grummons on 10/7/12 8:18am
Msg #437497

Excellent post. This is something you do not want to be a party to.

Reply by Karla/OR on 10/7/12 2:19pm
Msg #437546

While I appreciate your comment, I don't honestly get how you can say . . . you don't want to be a party to." As humans on this earth, we are probably NOT exposed to anything and everything possible throughout our lives, right? I HAVE been exposed to a debt reduction company (contracted as a paralegal signer) and NEVER felt there was anything on the downside with it. I am a pretty conservative person and had I felt or experienced something that was not morale or legal, I would have jumped ship immediately. I'm just saying unless you have personal experience in the trenches with such a thing, how can you berate it?