Posted by TracyKY on 3/22/12 2:14pm
Msg #415702

Hope for Home

Hi,

It's been awhile since I've been here, but I got a call today that I need advice on. I searched the archives and saw only one other post regarding this company, and it seemed shady. The documents I received via email say they are for a "Loan File Review Agreement" and I am supposed to collect a post-dated check for over $700 to send back with the documents. It requires 7 or 8 signatures, and one notarization. How do I determine if this is a legal situation in my state as far as collecting fees for this type of company?

Reply by MW/VA on 3/22/12 2:18pm
Msg #415704

Beware--it sounds like a loan modification application.

These are illegal in most states now, because it is illegal to charge an upfront fee for this kind of service. I know that if it were me I'd pass.

Reply by Linda_H/FL on 3/22/12 2:20pm
Msg #415705

See this link found in a google search

http://migration.kentucky.gov/newsroom/eppc_ofi/061110hope.htm

Note the paragraph about midway:

" In addition, the company charged an upfront, nonrefundable “membership” fee of $300 as part of the application process, as well as an additional 3 to 3.5 percent of the loan amount paid in advance to an escrow account. According to Kentucky Revised Statute Chapter 286.8, application fees may not exceed $100 and upfront fees are illegal."

Not saying this is the same company (don't get me wrong) but I'd guess start with the KY DFI?

Good Luck.

Reply by TracyKY on 3/22/12 2:36pm
Msg #415707

Re: See this link found in a google search

This is not the same company. This company is based in CA. However, after doing a little research thanks to you guys getting me started, it sounds like I need to call and cancel. Looks like Gov. Schwarzenegger signed SB 94 last year prohibiting any licensed or unlicensed person to collect upfront fees for loan modification or mortgage loan forbearance services. Seems the FTC enacted a regulation stating the same in Jan. 2011. So my question now -- do I also call the clients and warn them, or register a complaint with the FTC or California DRE, or just cancel and wash my hands of it?

Reply by Linda_H/FL on 3/22/12 2:46pm
Msg #415708

I know..I said it's not the same company

Didn't mean to allege that - I posted the link for the KY regulatory info and the part that said "upfront fees are illegal".

And the CA governor doesn't regulate Kentucky - so I'd check with that KY DFI...

Again, good luck.

Reply by TracyKY on 3/22/12 3:03pm
Msg #415711

Re: I know..I said it's not the same company

No, I know you didn't, I was just making that clarification just in case. Anyway, isn't it enough that the FTC banned collecting upfront fees? Thanks so much for your help! I already emailed the company and said I would not be completing the assignment. I tried calling but "no one was available". Also, ethically, would you call the client to cancel and suggest they research this "loan review" before they give money to this company?

Reply by Linda Juenger on 3/22/12 3:16pm
Msg #415713

Tracy, follow Bob's advice. Not your worry.They are adults n/m

Reply by Bob_Chicago on 3/22/12 2:21pm
Msg #415706

Know nothing about dox nor about company involved , BUT

my initial reacton would be to ::

wan wike a wabbit :-)

Reply by TracyKY on 3/22/12 3:36pm
Msg #415721

Thanks to everyone for their replies. I emailed the company (after calling & getting no answer) to let them know I wouldn't be doing the assignment tonight. After much thought, I did decide to call the clients & make them aware. I identified myself and asked if they were doing a loan modification with this company, and she said yes. I then told her that from my research, it is not legal for companies to collect upfront fees for loan modifications, and gave her the number for the Homeowners HOPE Hotline, which I had called prior to calling her, so they could confirm and answer any other questions. She was VERY appreciative.

Reply by MW/VA on 3/22/12 4:50pm
Msg #415726

I think you did the right thing, Tracy. At least

you will be able to sleep tonight. :-)

Reply by A S Johnson on 3/22/12 5:02pm
Msg #415729

Re: I think you did the right thing, Tracy. At least

I'm sure she will be able to sleep tonight, BUT folks, You can NOT give legal advise any place in the US as a Notary. You are really taking a chance and this is not covered by your E & O Insurance or any other insurance. Please belive me, I find myself in your shoes many times because I can't keep emotions to myself.

Reply by MW/VA on 3/22/12 5:44pm
Msg #415734

IMO warning someone about a scam isn't UPL. From what I

am reading, she didn't give them legal advice of any kind. She chose not to engage in illegal activity. Legal advice would be, for example, "do not proceed with this transaction as it is not in your best interests". She isn't pretending to represent them in the matter. They are free to make their own decision.
IMO none of these kinds of things would be going on if the banks had worked with people they way they were supposed to in the first place. The majority of loan mods that were supposed to be made available never materialized.