Loan Modification Outfits Begin Charging For Services In Steps In Attempt To Dodge Upfront Fee Prohibition

In Southern California, the Orange County Register reports:

• Some companies that advertise help avoiding foreclosure are trying to avoid a ban on advance fees by charging consumers in steps, according to loan brokers and state regulators. That’s illegal, said Tom Pool, a spokesman for the California Department of Real Estate (DRE).

• The bill, dubbed SB 94, clearly prohibits loan modification companies from collecting any money until all services are performed, Pool said. He said the DRE will investigate any consumer complaints related to companies skirting the advance-fee ban. “We knew folks were going to be looking for ways around the bill, and we are seeing these creative and clever approaches,” Pool said. “We are not buying it.”

For the story, see Loan aid firms skirt ban on advance fees.