May 29, 2024


Mad about real estate

The laws about starting your own loan modification company

Loan modification is one of the main buzz words in the real estate/mortgage industry presently. With 31{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} of American homeowners in some sort of default, it only makes sense that there would be a blooming industry from this mortgage fall out.

 The best way to have a profitable loan modification business is to work within the laws of your state. These laws are not to prevent you from doing business but to protect homeowners from unscrupulous people who want to take advantage of the situation.

 Most of the laws from state to state are very similar. Florida and California were the first to outline many of the laws because they have bourn the brunt of most of this crisis. Other states have come up with similar laws taking pieces of Florida and California law. California does differ from the other states. It requires a foreclosure consultant to register with the Department of Justice in accordance with certain requirements, and to obtain and maintain a surety bond of $100,000.

 California law prohibits a foreclosure consultant from taking any power of attorney from an owner for any purpose.  Florida regulates foreclosure consultants and prohibits a foreclosure-rescue consultant from engaging in certain acts or failing to perform contracted services. They Prohibit up front fees and require contracts in writing, statutory language and style with a full disclosure. The law provides for right of cancellation of the contract within 3 days.

As said previously, different states have very similar clauses. Some may be similar, for example, only the contract cancellation time may vary. All of them prohibit the collection of upfront fees. Many of these clauses and regulations do not apply if you are an attorney as they are governed under the rules of their State Bar.