Posted by Brasring_Ca on 11/15/10 4:37pm
Msg #361426

Loan Mod sign request

I have stayed away from these and just turned one back to an SS as I am asked to have client sign a few pages, check a few boxes a certain way and collect checks made out to an attorney Group and then return all. Question? Is this the legal way to do this or isn't this what is not supposed to be going on? I can't remember since I have only declined these so far. Thank you for any responses as I am clueless to what is ok and not ok, but doesn't sound ok to me??

Reply by S Peterson on 11/15/10 4:53pm
Msg #361428

Illegal in California, read below

ADVANCE FEES FOR LOAN MODIFICATIONS NOW PROHIBITED
On October 11, 2009, Governor Schwarzenegger signed Senate Bill 94 (Calderon), and the legislation took effect immediately upon his signature. Thus, California law now prohibits any person, including real estate licensees and attorneys, from demanding or collecting an advance fee from a consumer for loan modification or mortgage loan forbearance services affecting 1 – 4 unit residential dwellings.
IF YOU ARE A REAL ESTATE BROKER, OR THE DESIGNATED OFFICER OF A LICENSED CORPORATION, WHO HAS BEEN ISSUED A “NO OBJECTION” LETTER BY THE DEPARTMENT OF REAL ESTATE FOR LOAN MODIFICATION OR OTHER MORTGAGE LOAN FORBEARANCE SERVICES, YOU CAN NO LONGER ENTER INTO THESE AGREEMENTS EFFECTIVE AS OF OCTOBER 11, 2009, NOR CAN YOU COLLECT ANY ADVANCE FEES FOR SUCH SERVICES.
Agreements entered into and advance fees collected prior to October 11, 2009 are not affected. Advance fees inadvertently collected after October 11, 2009 must be fully refunded.
All real estate licensees should become familiar with the provisions of SB94 as there are substantial administrative and criminal penalties for violations. For full details on Senate Bill 94, CLICK HERE.
View Frequently Asked Questions and Answers from the California Department of Real Estate regarding California Senate Bill 94.


The can, however, put the attorney's fees into a trust. Attorney can't touch it until the Borrower signs the FINAL Modification.

Reply by Brasring_Ca on 11/15/10 5:41pm
Msg #361435

Re: Illegal in California, read below

Thank you, this was what I thought but could not remember the specifics. I simply let the SS know that I will not do anything having to do with loan modifications.

Reply by enotary/va on 11/15/10 5:27pm
Msg #361431

Illegal in Virginia.....

Reply by LKT/CA on 11/15/10 5:43pm
Msg #361436

It is illegal in CA to charge monies upfront for a loan mod. This includes attorneys - they also cannot charge monies upfront. They have to have the approved program from the lender before collecting monies - they cannot go through a "process" and collect monies along the way. No solid program - no money.

Reply by Linda_H/FL on 11/15/10 6:24pm
Msg #361446

It's illegal here in FL too..

and it's also illegal here to collect up-front fees for debt resolutions -

Who is this company doing this?

Reply by Doris_CO on 11/15/10 10:46pm
Msg #361476

From your description, this was an application for a loan modification and you handled it the proper way.

Reply by Brasring_Ca on 11/16/10 12:48am
Msg #361479

Yes, I believe that was exactly what it was. I was shocked that this SS was doing these, as I have done work for them in the past but never these.

Reply by MW/VA on 11/16/10 8:45am
Msg #361503

Keep in mind that the ss doesn't always know what kind of transaction it is.
Good for you for not taking it. :-)