Posted by KimTOR on 4/10/10 1:07pm
Msg #331139

Wow they got me

I was set up on a loan mod app for this afternoon. They, of course, called it something completely different then after reviewing the paperwork and seeing they were asking money up front I canceled the appointment. Like I need to start a bad rap with these companies but this whole thing is getting out of hand. Sort of ticks me off that they would put me in this position in the first place. I don't believe that companies should be doing this to homeowners when there are plenty of companies out there that will provide this assistance for free.

So now I'm going to have a mad SS with me. Just what I needed. UGGGGG

Reply by BossLadyMD on 4/10/10 1:19pm
Msg #331141

what state is the SS company in

its completely legal to collect money upfront in MD, provided that its for attorney fees only. you'd think the SS would do their homework first.

Reply by KimTOR on 4/10/10 1:48pm
Msg #331145

Re: what state is the SS company in

SS is in California

Reply by BossLadyMD on 4/10/10 1:57pm
Msg #331146

Re: what state is the SS company in

thanks - then they should know better

Reply by Ilene C. Seidel on 4/10/10 3:56pm
Msg #331162

Re: what state is the SS company in

BossLady I believe you are very wrong. It's not legal to collect funds up fron for a mod agreement even if it's a lawyer. I reported a company to the commissioner for that you better check the laws again.

Reply by BossLadyMD on 4/10/10 4:29pm
Msg #331171

See policy exempting attorneys fitting this criteria...

-----For a list of individuals and entities which are excluded from being considered “credit services businesses” under the MCSBA, and which are thus exempt from the licensing and other MCSBA requirements, see CL § 14-1901(e)(3). Note that under subparagraph (e)(3)(vi), an individual admitted to the Bar of the Court of Appeals of Maryland is exempt only “when the individual renders services within the course and scope of practice by the individual as a lawyer and does not engage in the credit services business on a regular and continuing basis.”-----

Entire act is linked http://www.dllr.state.md.us/finance/advisories/advisory9-08.shtml

Verdict: An attorney rendering services or 'advocating' for his client is actually exempt from licensing and the Mortgage Credit Service Business Act (MCSBA) and thus, may collect upfront fees.

Reply by KimTOR on 4/10/10 2:26pm
Msg #331150

Want to say both the SS and the company providing the loan mod are both located in CA

Reply by Ilene C. Seidel on 4/10/10 3:57pm
Msg #331163

Kim why don't your explain to the company the reason you declined the job? Most states it's illegal to collect funds up front for a mod agreement.

Reply by KimTOR on 4/10/10 4:05pm
Msg #331165

I told them exactly why I declined. Just more upset with myself that I didn't see the signs of what they were asking. Should have seen the red flags that it was a loan mod app. Oh well live and learn but I'm pretty sure the SS won't be calling me again. Oh well, ethics before profit!

Reply by Ilene C. Seidel on 4/10/10 4:07pm
Msg #331167

It's not your fault they should know better. In the future ask more questions and don't feel bad for doing something that's against your better judgement. You did the right thing.

Reply by Illa/NC on 5/25/10 12:14pm
Msg #338042

I was contacted by Notary Pro to take residential loan modification retainer agmt to client, get it and other docs signed, notarize an affidavit of identity, collect a $3,500 retainer check and send all back to Scheer Law Firm in California. Something about this didn't feel right in my gut. After I returned to my office with signed papers and check in hand, I researched and found that in NC it's illegal to charge an upfront fee for foreclosure assistance. Even though I don't know if the client is facing foreclosure, I just do NOT want my name and/or notary seal to be involved in anything remotely close to illegal. So I've informed Notary Pro that I will not be sending any docs or check to the law firm and that I am returning the same to the client. I believe this is the best course of action for me to remain a dedicated, law abiding notary in the state of NC. I THANK NOTARY ROTARY FOR THIS FORUM; IT HAS HELPED ME A LOT. AND THANKS TO EVERYONE WHO CONTRIBUTES TO IT!!

Reply by LKT/CA on 4/10/10 4:09pm
Msg #331169

http://www.dre.ca.gov/pdf_docs/FraudWarningsCaDRE03_2009.pdf

The SS and the company should be reported. The above link has the info. When I am called and the job is "called" a loan mod - I ask questions:

Is this a FINAL loan mod or the application process?
Am I notarizing any signatures on any forms?
Am I to collect post dated checks or credit card info?
Am I to collect copies of paperwork from the clients?

If you ask all four of those questions, it will certainly reveal whether the job is really the final loan mod or a loan mod application. If the scheduler is vague or hems/haws/stutters when answering, I'm sure the job is a loan mod application. Companies have come up with all kinds of creative names for the job but that the description of the job will reveal the truth. Ignore job titles and ASK QUESTIONS, that way you can reject the job on the spot and not have to waste time giving it back.

Collecting up front loan mod app fees is a hot topic all over the industry - how can SSs not know about the new laws. Who cares if the SS is mad - they are accessories to the commission of a crime and if they didn't know it was illegal - ignorance of the law won't help them escape penalities/punishment from the powers that be.

Reply by KimTOR on 4/10/10 4:33pm
Msg #331172

Thank you for your awesome advice! They didn't call it a "loan modification" which threw me. I now know and should have trusted my instincts! But now I have learned. We all sometimes learn the hard way.

I know the practice of accepting up front fee's is NOT illegal in all states however I am not at all comfortable with this tactic especially when they state of Oregon has so many options for FREE help in modifying home loans.

I know this has been ground to death on this board but I'm really ticked that companies take advantage of not only these struggling homeowners but also the notaries. And why would a reputable signing company want to have anything to do with these types of transactions? That's assuming they are reputable and being I've never worked with them before I really don't know. Seems trying to weed out the scammers from the non scammers isn't worth the risk for SS's. But that's my opinion and I know not everyone or every signing service is going to agree with me and that's ok.

I'm just not gonna watch these poor homeowners be taken advantage of legal or not, when life is so hard on us all right now. These people live in my small town, how am I gonna feel passing them in the store after they've been taken advantage of? So sad

Sorry to rant I'm just sad for people who are just trying to make ends meet who get taken advantage of.

Reply by LKT/CA on 4/10/10 4:50pm
Msg #331176

Since you mentioned that both the company and the SS are located in California, I wanted to post the link so everyone would know that even attorneys in CA cannot charge up front fees. Many notaries, including myself, have just decided we didn't want any part of the loan mod application jobs, even if it is not illegal to collect up front fees in that state. Even though I'd be wearing my "notary hat" in such a job, I have a real estate license and this could be a conflict of interest and I could be reprimanded/fined by the DRE as I "should know better". Therefore, I turn down ALL loan mod application jobs. Even if I didn't have the license, I'd turn them down. It is widely known and reported that companies that get the money up front don't bother to do anything for the homeowner anyway.

Glad you turned the job back, particularly with these companies being in CA and violating the laws.

Reply by Susan Fischer on 4/11/10 12:44am
Msg #331206

My policy too, no "loan-mods" unless it's a true lender

mod - which are short, sweet, ligit, and a boon for so many borrowers.

And I love the FOUR QUESTIONS - although it's a lot tougher when they lie from the jump. But for me? The lie negates the deal, and if the signing is given back when the truth pops up? TFB.

Ethics before profits. That's a bumper sticker I'd sport. Applies everywhere.

Good SSs get this, don't they?

Reply by MikeC/NY on 4/11/10 12:18am
Msg #331202

I find it interesting that these companies are using notaries as part of their scam - if there's nothing to notarize, why do you need us? Probably because the unsuspecting homeowner will feel more comfortable if there's someone in some sort of "official" capacity involved....

Scamming company tells them they will send a notary to collect the application and the check, so the owner thinks it's legit - meanwhile, our ONLY official function is to properly identify them, and we're not even asked to do that... I'm sure there are a lot of unsuspecting notaries who have fallen into this, only seeing an opportunity to pick up a few extra bucks and having no idea what it is they're involved in...

I think your second question - am I notarizing any signatures on any forms - should actually be the first one. If the answer is "no", the next logical question should be "why do you need a notary to do this?"

Reply by GOLDGIRL/CA on 4/11/10 12:39am
Msg #331205

Mike: You are so, so, so right.

We as NSAs are so internally wired to answering the phone and saying yes to jobs, that we should put the brakes on we get hit with: "You don't have to ID the person, you don't have to notarize; just have them sign." Well, that sounds simple, but DON'T do it. In the first place, how do you know who is signing? Don't be a conduit for these scamsters. Be it load mod apps, credit consolidations, whatever. you are stepping into a pit of crocodiles. You will get sued along with the scumbags who used you to get their dirty work done. If they just want someone to get something signed, tell them to call a taxi driver. Don't risk your ocmmission and good name with these idiots. By the way, Mike, good luck on your new career. Keep in touch here cos your posts are always great.

Reply by JanetK_CA on 4/11/10 3:23am
Msg #331208

Re: Mike: You are so, so, so right.

Mike's and your comments just made me think of something else. If these people are telling the borrowers that they will send "a notary" to pick up the stuff, that could actually be interpreted to be illegal in California. We are prohibited from using the title "Notary Pubic" for anything other than the notarial act. That restriction was probably intended to prevent the very thing Mike suggested - attempting to infer credibility or legality to something by association. Not at all appropriate, imho.

Reply by KimTOR on 4/10/10 8:16pm
Msg #331192

Was looking around for Oregon's laws regarding collecting up front fees and found this.

The 2008 Oregon Mortgage Rescue Fraud Protection Act prohibits loan modification companies from collecting advance fees and using confusing contract language. Oregonians should not pay up-front fees for mortgage modification help.

I would love to see the exact wording for that "Act". Any Oregon notaries familiar with this one?

Reply by Sylvia_FL on 4/10/10 8:35pm
Msg #331196

Oregon Mortgage Rescue Fraud Protection Act


http://www.leg.state.or.us/08ss1/measpdf/hb3600.dir/hb3630.intro.pdf