Jim Wasserman at the Sacramento Bee has a great article today about hiring a mortgage rescue solicitor. The gist: be careful. Jim points out that most mortgage rescue solicitors cannot be paid in advance. Jim explains that the DRE has rules on this. The rules include:
• If your lender has issued a notice of default against you (after you have missed three or more monthly payments) do not pay an advance fee, even to someone with a real estate license.
• A lawyer is exempt from this and can charge up front.
• A fee paid to some licensed real estate professionals for loan modification is to be paid only after the work is done.
• Remember, too, nonprofit counseling firms such as Neighborworks, the Sacramento Home Loan Counseling Center, ByDesign Financial Services and Sacramento Mutual Housing Association will give the same help for free.
Circumstances are slightly different for those who are still current with payments, or haven’t fallen far enough behind to get a notice of default. These borrowers can be charged an advance fee. But:
• The firm must have you sign an agreement saying what services will be performed, when they will be performed and what they will cost.
• Before you sign, the agreement must be submitted to the Department of Real Estate for review and permission to collect advance fees.
• To see a list of those brokers who have won permission to do these deals, visit this link: www.dre.ca.gov/mlb_adv_fees_list.html .
If you are going to hire someone to modify your mortgage, your best bet is an attorney. Only an attorney can negotiate your mortgage modification AND provide you legal advice.