Direct Loan Counseling

Effective October, 2009 in California, it is illegal to collect any fees, regardless of the form, for negotiating or attempting to negotiate a loan modification for a residential mortgage. All modification services must be fully completed before any money can be collected. It is also illegal to divide fees or services into components for the purpose of avoiding this law.

HUD approved housing counseling agencies are exempt from this law. For businesses outside of California, please check with the agency that regulates this industry.

---------------------------------------~Foreclosure Consultants~---------------------------------------~~We urge caution. These companies typically offer to stop foreclosure on your home and assist in obtaining a repayment plan from your mortgage company. Some companies may make reference to your mortgage company in their solicitation implying an affiliation or may use other insignia or names that imply a relationship or affiliation with a mortgage company or government agency. Despite their claims these companies do not have affiliations with any government agency or any special relationship with your mortgage company. Nor do they as they may imply have the ability to obtain more lenient repayment terms than you may be able to obtain by contacting your mortgage company directly. ~ ~If your written contract does not inform you of your right to a refund or to cancel you may demand your refund or cancel your contract at any time without regard to these time limits. Despite the law’s protections if you are not dealing with a reputable company you may find it difficult to enforce your rights.~~Homeowners whose residences are in foreclosure are subject to fraud deception harassment and unfair dealing by foreclosure consultants from the time a Notice of Default is recorded until the time surplus funds from any foreclosure sale are distributed to the homeowner or his or her successor. These foreclosure consultants often charge high fees the payment of which is often secured by a deed of trust on the residence to be saved and perform no service or essentially a worthless service. Homeowners relying on the foreclosure consultants' promises of help may take no other action are diverted from lawful businesses which could render beneficial services and often lose their homes sometimes to the foreclosure consultants who purchase homes at a fraction of their value before the sale. Vulnerable homeowners are increasingly relying on the services of foreclosure consultants who advise the homeowner that the foreclosure consultant can obtain the remaining funds from the foreclosure sale if the homeowner executes an assignment of the surplus a deed or a power of attorney in favor of the foreclosure consultant. This results in the homeowner paying an exorbitant fee for a service when the homeowner could have obtained the remaining funds from the trustee's sale from the trustee directly for minimal cost if the homeowner had consulted legal counsel or had sufficient time to receive notices from the trustee regarding how and where to make a claim for excess proceeds. ~