CALIFORNIA HOMEOWNERS SHOULD KNOW: Loan Modification Companies To Be Avoided

Originally posted in May 2009.

When I spoke with the California Department of Real Estate a few weeks ago, they told me that they would soon be publishing information related to the problematic companies and “scammers” involved in loan modifications. Here it is…

The DRE has recently published an online listing of individuals and companies and that have received “Desist & Refrain” orders as a result of activities related to loan modifications and/or foreclosure rescue transactions. These firms have either been ordered to STOP offering services or should NOT be accepting advance fees for their services.

According to the DRE: “Before considering engaging the services of any of the persons or entities listed below, it would be prudent to inquire about the disposition of the action that has been filed against the respondent. Further information regarding any administrative action may be obtained through the Sacramento Office at (916) 227-0906.”¨”

As everyone involved in helping homeowners remain in their homes and avoid foreclosure knows, the industry has been harmed by the unscrupulous operators that have sought to defraud homeowners when they are at their most vulnerable. This type of fraud is unquestionably to be despised and must be stopped. Legitimate and reputable loan modification firms should make this list and link available to their clients so that they can help others who may have been defrauded by the operator of such a scam.

It is critical that the legitimate providers of loan modification services unite against these individuals and organizations in order to help clean up the industry so it can be seen as being an important resource for those at risk of foreclosure.

Desist and Refrain Orders for Loan Modification Activities:

http://www.dre.ca.gov/cons_drs.asp

Another list consumers should be aware of lists the companies and individuals that have received “Desist & Refrain” notices for being unlicensed or improperly licensed when they were conducting transactions regulated by the Department of Real Estate. The following persons or entities have been issued a Desist and Refrain Order for conducting real estate activity without being properly licensed.

Desist and Refrain Orders for Unlicensed Activities:

http://secure.dre.ca.gov/publicasp/unlicenseddnr.asp

Homeowners can file written complaints with the Department of Real Estate and here’s an overview of the process:

Investigations by the Department of Real Estate’s Enforcement Section are initiated on the basis of the written complaints they receive. Before they investigate, they must determine two things:

That the individuals or companies involved are operating under the DRE’s jurisdiction.
That the complaint relates to possible violations of Real Estate Law or Subdivided Lands Law.

What The Department of Real Estate Can Do

The DRE investigates complaints against real estate brokers and salespersons accused of misleading or defrauding consumers. If they can prove a violation of the Real Estate Licensing Law, they may hold a formal hearing, which could result in the revocation or suspension of the agent’s license.

What The Department of Real Estate Can’t Do

The Department of Real Estate cannot act as a court of law, so they can’t order monies refunded, contracts canceled, damages awarded, etc. For these types of outcomes, you need to consult an attorney.

What You’ll Need to File a Complaint With the Department of Real Estate:

Review: Complaint Form Information (RE 519A)

Complete the Form: Licensee/Subdivider Complaint (RE 519)

When Completing the Complaint Form

You need to submit your complaint in writing or the Department of Real Estate will not investigate. The department recommends that you summarize your complaint in a chronological manner using the following guidelines:

State what happened. Start from the beginning and describe the events as they occurred. Be as specific as possible as to who said what and to whom.
State who was present during conversations or acts.
State when and where conversations or acts occurred.
Provide the names, addresses and telephone numbers of any witnesses.
Provide photocopies of any documents involved.

The department says that “documentary evidence is especially important!” Here’s what it says about such evidence on the DRE Website:

“To expedite the handling of your complaint, you should provide legible photocopies of all documents relating to your transaction such as listings, offers, deposit receipts, notes and trust deeds, correspondence, legible copies of the front and back of checks involved, escrow documents, advertising, etc., and attach them to the written complaint. If you are unable to submit photocopies, you may submit the originals which will be copied and returned to you.

Submitting the Complaint Form

According to the DRE, you can either mail or hand-deliver your completed complaint form, along with any attachments to the DRE District Office nearest you. They have offices in Los Angeles, San Diego, Fresno and Oakland, and I’ve listed the addresses and phone numbers of the District Offices below:

Fresno (559) 445-5009

2550 Mariposa Mall, Room 3070

Fresno, CA 93721-2273

Los Angeles (213) 620-2072

320 West 4th Street, Suite 350

Los Angeles, CA 90013-1105

Oakland (510) 622-2552

1515 Clay Street, Suite 702

Oakland, CA 94612-1462

San Diego (619) 525-4192

1350 Front Street, Suite 3064

San Diego, CA 92101-3687