California Homeowners: Beware Of Requests For Upfront Fees

In California, the San Diego Business Journal reports:

• Requests for fees to be paid in advance should send up red flags to homeowners, says [California] Department of Real Estate spokesman Tom Pool. Only a select group of companies can charge upfront fees, only because they have signed “an advance-fee contract” with the department that explains exactly what services they will provide.

• “The way the advanced-fee law works is they can collect an advance fee if they put the money into a trust account. The money cannot be expended until the service is provided,” said Pool. “We want to make sure the contract used by the broker meets those minimum requirements.” [...] Once a notice of default has been issued, no consultant can take an advanced fee for modification services, according to Pool.

For the story, see Foreclosure Deals Sound Too Good to Be True? They Probably Are (Homeowners Should See Red Flags When Businesses Demand Upfront Fees).