Loan Modification Scams "Getting Worse & Worse Every Day," Says California DRE Chief

In San Francisco, California, cbs5 did an investigative report on loan modification firms and featured two firms which which reportedly took at least $3,000 each in upfront fees(1) from two different homeowners seeking help dealing with their house payments:

• [T]he State of California has now taken action against both companies. The Department of Real Estate accuses Saving California and People's First Financial of taking money upfront without the agreements necessary to protect consumers, and in desist and refrain orders, has ordered them to stop those practices. But the state says those two cases represent just the tip of the iceberg. "It's getting worse and worse every day," said California Department of Real Estate Commissioner Jeff Davi.

For the story, see Loan Modification Firms May Not Always Be Helpful. (read story) (watch cbs5 video).

(1) Taking upfront fees from California homeowners for loan modifications requires prior approval from the California Department of Real Estate, and is outright illegal if a notice of default has already been recorded against the homeowner's property. See Upfront Fees For Loan Modifications In California Prohibited Once Notice Of Default Is Recorded On Home In Foreclosure.