Kathy Woods Oct. 16, 2009, 12:35pm
Jerry Brown (D)
SACRAMENTO, Calif. (Legal Newsline)-California homeowners should avoid individuals and businesses that charge up up-front fees for home foreclosure relief services, California Attorney General Jerry Brown said Thursday.
In a statement, he noted a new state law that makes charging up-front fees for home foreclosure services illegal. Gov. Arnold Schwarzenegger signed the law -- outlined in Senate Bill 94 -- earlier this week.
"Over the past two years, unscrupulous attorneys and real estate brokers have abused their trusted roles and exploited desperate homeowners seeking to avoid foreclosure," Brown said. "The loophole that allowed this abusive practice to continue has now been closed, and homeowners should avoid any person charging up-front fees for foreclosure relief services."
Senate Bill 94, which took effect at signing, makes it illegal for any licensed attorney or real estate agent "who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower...to claim, demand, charge, collect, or receive any compensation until after the [attorney or agent] has fully performed each and every service the licensee contracted to perform or represented that he, she, or it would perform."
Brown has sought court orders to shut down more than 30 companies and has brought criminal charges and obtained lengthy prison sentences for dozens of deceptive loan modification consultants.
Senate Bill 94 cleared the state Legislature handily. In the Senate it was approved 36-4 and the Assembly passed the measure on a 62-10 vote.
Earlier this year, Brown ordered 386 mortgage foreclosure consultants to register with his office and to pay a $100,000 bond as required by a new state law.