First Gov

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.

California Law requires that any person who solicits, induces, or causes a California resident property owner to contract with, or pay any consideration to a foreclosure consultant must have a bond from a surety company in an amount equal to at least twice the fair market value of the real property that is the subject of the contract. In addition, the representative must hold a valid California Real Estate sales license. The representative must provide the consumer, in writing, under penalty of perjury, that they are properly licensed and bonded. Failure to comply with these requirements renders the contract void. By law, the contract must also provide for a three-day cancellation right and no monies must be paid prior to performing all the services set forth in the contract.

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.