Eastwood, Copeland, Schultz & Associates

The FTC MARS Rule makes it illegal for a company offering mortgage assistance relief services to collect any fees, regardless of the form, until it provides a written offer for a loan modification or other relief from your lender and you accept the offer. They must also provide you with documentation from your lender showing the changes to your loan if you decide to accept the lenders offer. Also, they must clearly tell you the total fee they will charge for their services. It is illegal to divide fees or services into components for the purpose of avoiding this law.

Under the same rule, attorneys who offer mortgage relief services can require an advanced fee ONLY if they: are licensed to practice law in the state where you live or where your house is located; they’re providing you with real legal services and providing mortgage assistance relief services as part of the practice of law; they’re complying with state ethics requirements for attorneys; AND, they place the money in a client trust account, withdraw fees only as they complete actual legal services, and notify you of each withdrawal.

Before you hire a firm or anyone claiming to be an attorney, do your research. Check to ensure they are properly licensed and that there is no disciplinary action against them. Ask what their expertise or specialty in law is and if they have ever provided foreclosure relief services. Also ask what the outcome was for any relief services they have provided.
Many companies claim to conduct forensic audits, mortgage loan audits, or foreclosure prevention audits backed by forensic attorneys where they offer to review your mortgage loan documents and determine whether your lender complained with federal and state mortgage lending laws. They often claim the audit reports can be used as leverage with the lender to stop foreclosures, accelerate the loan modification process, reduce your loans principle, or even cancel your loan. The truth is there is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if it is conducted by a licensed attorney, trained auditor, or mortgage professional. While some federal laws allow you to sue your lender based on errors in your loan documents, even if you win in litigation, your lender is not required to modify your loan simply to make your payments more affordable. If you cancel your loan, you will have to return the money borrowed, which may result in you losing your home.

Business Consumer Alliance advises to avoid any business offering foreclosure relief that:
• guarantees to stop the foreclosure process, no matter what your circumstances are
• instructs you not to contact your lender, attorney, or credit/housing counselor
• collects fees before providing any services or only accepts payment by wire transfer or cashier’s check
• encourages you to lease your home so you can buy it back over time
• recommends that you make your mortgage payments directly to them or any party other than your lender
• urges you to transfer your property or deed to them
• offers to buy your home for cash at a price that is inappropriate for the housing market
• pressures you to sign papers before you are able to review the terms and conditions or before you have time to thoroughly read and understand the agreement.

Homeowners having trouble making their mortgage payments or who are in default have options to consider before hiring a foreclosure rescue company or an attorney. Your mortgage servicer can assist you with foreclosure prevention methods that may get you back on track with your payments. In 2014, new mortgage rules went into effect which requires mortgage servicers to inform homeowners about all mortgage workout plans available to them if they have defaulted on the loan and to assign personnel help if the payment is past due.

If you are late on your payment or are aware that you will have difficulty making your payments, contact your mortgage servicer right away. Keeping the lines of communication open is critical to resolving issues with your loan. By staying in touch with your servicer you may be able to delay foreclosure proceedings if they are working with you to find a solution to your problem. Some of the options to bringing your loan current and save your home include repayment plans, loan modifications, or even forbearance. If you’re ineligible for any of these options, your servicer may be able to help you find a solution other than foreclosure, like a short sale or a voluntary transfer of the property through a “deed in lieu of foreclosure.” Other options to consider are selling your home or filing bankruptcy, although, due to the long lasting and serious effect of bankruptcy, this option should be considered as a last resort.

If you are having a hard time reaching or working with your loan servicer, or if you are seeking assistance to help you through the foreclosure prevention process, you can speak to a certified housing counselor. A counselor with a housing counseling agency can assess your situation, answer your questions, go over your options, prioritize your debts, and help you prepare for discussions with your loan servicer. Housing counseling services usually are free or low cost. Contact (888)995-HOPE (4673) or visit www.hopenow.com for a list of certified housing counselors in your area. You may also contact your local U.S. Department of Housing and Urban Development (HUD) office or the housing authority in your area for help in finding a legitimate housing counseling agency nearby.