Saying California is "awash with con artists" who prey on families facing foreclosure, the state’s attorney general is giving foreclosure consultants until July 1 to register with his office and post a $100,000 bond.
California Attorney General Jerry Brown said scam artists are posing as legitimate foreclosure consultants, promising homeowners they will prevent foreclosure but charging "huge up-front costs" without providing "an ounce of help."
State lawmakers passed a bill last year, AB 180, creating the registration requirement.
In California, only attorneys and licensed real estate brokers are permitted to collect fees in advance for negotiating loan modifications and short sales with lenders.
Real estate brokers who want to collect fees in advance for such services must enter into written agreements with clients, and the state Department of Real Estate must sign off on the language to be used in the agreements.
The department has sent "desist and refrain" letters to 248 companies, licensed and unlicensed, stemming from their mortgage modification or foreclosure rescue activities.
Last week, the Federal Trade Commission shut down two Downey, Calif.-based foreclosure rescue operations based on their allegedly misleading marketing claims (see story).
The FTC has begun a rulemaking proceeding to determine whether some practices by companies providing such services are unfair or deceptive and should be reined in by new standards to protect consumers.
What’s your opinion? Leave your comments below or send a letter to the editor.