BrokerageIndustry News

Brokers OK’d to negotiate loan mods

600 California brokers can collect advance fees

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The number of real estate brokers authorized by California regulators to collect advance fees for negotiating loan modifications and short sales on behalf of homeowners has grown from less than two dozen in mid-November to almost 600. California requires real estate brokers who negotiate with lenders to enter into agreements with borrowers detailing the services they will provide if they plan to collect their fees upfront. Fees collected in advance are placed in a trust account and can be drawn down only as services are performed. The California Department of Real Estate must sign off on the language in the agreements brokers plan to use before they can collect upfront fees. According to the Department of Real Estate's Web site, 596 real estate brokers were authorized to collect advance fees as of April 24. That's up from 21 companies in mid-November and 205 through Feb. 5. Many nonprofits offer counseling for distressed homeowners at little or no cost. The Homeownership P...