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Loading ...In California, more and more real estate professionals and companies have been taking on the business of helping borrowers negotiate loan modifications with mortgage lenders, as the number of homeowners facing foreclosures increase and as more loan modification funds are offered by the federal and state governments.
To enter the loan modification market, these agents and brokers who planned to charge fees upfront from borrowers had to sign advance fee contracts with borrowers. The contracts require the parties to put fees in a trust deposit account from which the broker could draw from as the loan modification progresses. Advance-fee contracts had to be approved by the California Department of Real Estate before the contracts become valid.
Borrowers need to check that they are dealing with licensed brokers, as there are lots of companies which have sprouted overnight to take advantage of the rise in foreclosure properties and borrowers in danger of foreclosures.
California Attorney General Jerry Brown has just announced the arrest of three people who put up First Gov, also known as Foreclosure Prevention Services, which charged $1,500 to $5,000 but failed to deliver promised services to homeowners.
One of the legitimate negotiators who have produced results for homeowners is Guardianship Real Estate Services in Redlands. It imposes a fixed fee of $3,000, with $1,600 paid upfront and the $1,400 paid after the loan is modified and the homeowner is able to avoid foreclosure.
Another one is Home Resolution & Credit Services Inc. which charges $2,500 upfront and has about 25 processors negotiating with lenders for about 300 borrowers. Its president Robert Aldana said that his processors have achieved outstanding results, such as two percent fixed-rate, debt relief for five years and payment relief until the home is sold.
Meanwhile, what Fortune Bancorp has done to get into the foreclosure prevention business was to leverage the services of licensed independent brokers by hiring them as partners to work under its Credit Angel service. Brokers get $1,250 for each successful modification for borrowers who each pay a fixed fee of $2,850.
