SB94 - New Loan Modification Legislation for state of California
on Friday, July 24th, 2009 at 1:02pm.
As I said in my last blog SB94 will have an effect on how consumers handle their mortgages SB94 has already passed the Senate and the community and now goes to the assembly there are many reasons to think this will help as well as many reason to think it would not, the bill it self is as follows
This bill would prohibit persons from charging advance fees to
borrowers in connection with a loan modification, and require
those who wish to charge a fee for loan modification services
(after performing them) to provide a specified notice to
borrowers regarding other options available to the borrower.
The violation of those restrictions would be a public offense
and subject the violator to a fine, imprisonment, or both.
This bill would additionally:
prohibit servicers from imposing any interest or charge for
performing services for borrowers in connection with loan
modifications or other forms of loan forbearance or
specifically prohibit any California Finance Lender Law
licensee from making a false, deceptive, or misleading
statement, representation, or omission in connection with
their lending or brokering activities.
On March 24, 2009, this Committee held an informational hearing
that focused on the serious problem of foreclosure related scams
facing delinquent homeowners. Many of those scams involve a
promise to renegotiate a delinquent borrower's loan in exchange
for a significant up-front fee. In arresting three members of a
foreclosure fraud ring in Southern California last November, the
Attorney General's office reported:
The two women operated a company called Foreclosure Freedom,
which sent hundreds of fliers to Californians promising help
in stopping the foreclosure of their homes. The fliers
read: "FINAL NOTICE - Respond only to this notice
immediately." This is similar to First Gov scam, which the
Attorney General stopped late last year.
When homeowners called the number on the flyer, they were
told their mortgages could be renegotiated to a lower
monthly payment. Victims, however, were required to pay
thousands of dollars in up-front fees and were instructed
not to contact their lenders. Victims were assured the
company had "private lenders and specialists exclusive to
their company who are very experienced in the options and
methods used to renegotiate home loans," yet neither of the
women who operated the company had real estate licenses, legal training, or any experience in the home mortgage
market. Investigators found no evidence of any successful
loan modifications and most of the victims were either
forced into bankruptcy or lost their homes to foreclosure.
This is just one example unfortunately there are many more I mean if there was only two or three that did this the government would not get involved. Now we have a law going into affect and where does that leave us? There are not many choices, you can go to a Nonprofit Housing Counseling Agency, or you could call your bank and see if they will modify your loan, or you can go to a company that reduces your principle balance, either way do not wait till you can not afford your payments, research every thing before it gets out of hand.