Nevada Regulator Orders Shutdown Of 26 Loan Modification Outfits For Failure To Comply With Licensing, Bonding Requirements

In Las Vegas, Nevada, the Las Vegas Review Journal reports:

• The Nevada Mortgage Lending Division said Monday that it is ordering 26 residential mortgage loan modification consultant companies to close and refund unearned payments from customers. Another 18 firms are allowed to continue working while their licenses are processed. Law firm Frederickson, Mazeika & Grant is the only firm that has obtained a license. The division is forcing companies to close if they failed to obtain a $75,000 surety bond required by a new state law.

***

• The Nevada Legislature this year enacted a law requiring licenses and bonds for loan modification companies. [...] The Legislature required bonds and licensing because of reports that homeowners paid mortgage modification firms upfront for assistance, received no help and were unable to get a refund. "We will not allow those companies who have not met their legal obligations to operate," Commissioner Joseph Waltuch said in a statement Monday. "If consumers are going to pay for loan modification assistance, they must be able to trust that there's recourse if they've been harmed in some way."(1)(2)

For more, see Agency closes alterers of loans (Division calls for shutdown of 26 mortgage modifiers).

For the Nevada Mortgage Lending Division press release, see As bonding deadline passes, State Mortgage Lending Division moves to close down some loan modification providers.

In a related story, see Las Vegas Business Press: State trying to stop the scams (Government agency says complaints about unethical mortgage loan modifications mounting).

(1) The story states that many loan modification consultants have been unable to get or pay for surety bonds because they lack financial strength or have bad credit, according to Cynthia Duffy, part owner and the qualified employee for All Vegas Foreclosure Prevention. Duffy reportedly paid $3,000 for a $75,000 bond but some were quoted $15,000 for bonds.

(2) The Nevada Division of Mortgage Lending recently released this list of companies authorized to work with consumers in modifying home loans.