Borrower Beware of Loan Mod Companies

The California Department of Real Estate has issued warnings to consumers regarding loan modification companies. Some are practicing in violation of law, and the DRE is in the process of performing loan modification company investigations and audits. If an advance fee agreement is required, or if a company purport to assist borrowers even after a Notice of Default has been issued, then consumers should be wary to ensure the company is compliant with legal restrictions on advance fee agreements and post-NOD representation. Both borrowers and brokers should consult an attorney to ensure compliance.