Threatening possible criminal and civil prosecution, Attorney General Brown of CA ordered 386 mortgage foreclosure consultants to post $100,000 bonds and register with his office. Brown also unveiled a new loan modification fraud website (http://ag.ca.gov/loanmod).
Also this week, Brown closed two fraudulent foreclosure-assistance companies — U.S. Foreclosure Relief Corp. and H.E. Servicing, Inc. –and secured a court judgment of more than $1million in restitution for homeowners who paid upfront fees for non-existent loan-modification services. Under the judgment, a court-appointed independent receiver will oversee the repayment program, which will be paid through frozen company funds and the sale of personal items owned by the executives of the companies.
By law, individuals and businesses offering mortgage-foreclosure consulting, loan-modification, and foreclosure-assistance services, unless exempt, must register with the attorney general’s office and post a $100,000 bond. It also is illegal for loan-modification consultatns and businesses to charge up-front fees for their services. Non-profit housing counselors certified by the U.S. Dept. of Housing and Urban Development (HUD) provide free assistance to homeowners.