Illegal California Loan Modification Companies Under Investigation – The Moral Of the Story: Hire A Licensed Local Attorney
CNBC.com is reporting that illegal California loan modification companies are now under investigation. In my view, homeowners should never, never, never hire a California company to attempt a loan modification in New York.
These companies are committing a misdemeanor in New York by practicing law here without a license; they are illegally taking advance fee payments that “rescue” companies are not allowed to accept; they make false and exaggerated promises; and they are unlicensed and unregulated. To add insult to injury, many appear to be run by the same type of people who put borrowers into predatory loans in the first place. A loan mod should only be handled by a local licensed attorney who can review all of the relevant options and who can also assist with foreclosure defense and counterclaims, and with bankruptcy, if needed. Out-of-state companies may help sometimes but many will leave clients in a lurch with no backup plan if the loan mod is not successful.
My own firm is now handling loan modifications in New York where I am licensed and have practiced for nearly 20 years but I wouldn’t dare to handle one outside New York. It is outrageous that these California companies are doing this. I am personally getting spam email from many of them almost daily offering loan modification services from them. This may look enticing to a homeowner who does not have a lawyer helping them.
What keeps homeowners away from lawyers sometimes is the worry that they cannot afford legal help. Ironically, in many cases these scam rescue companies actually charge much more than a lawyer would and produce no results and offer no backup alternatives. Nearly every homeowner would be better off if they just went to a local attorney in the first place.
Here is the cnbc.com video news report.
I warned about using these companies before: