RSSHow to Set Up Your Loan Modification Business – Learn These Restrictions on Charging Advance Fees
Jan 25
Home Loan Advance Fee, Advance Fees, Business Advance, Business People, California Law, Florida Law, Foreclosure, Guarantee, Loan Business, Loan Modification, Money Loan, New Business, New Laws, Prohibitions No Comments
You have probably figured it out by now, a lot of people are making big money in the loan modification business. One of the reasons for this is that there are not a lot of laws out there that regulate the loan modification business. Some people are just getting into this new business may not be aware that new laws are being passed that affect one important part of this business, namely the charging of an advance fee.
In this article, I am going to provide you with some information regarding the types of new laws we are seeing that affect our industry. To those of us in the loan modification business, advance fees are important as as the collection of these fees help us guarantee that we will be paid for the services we are providing.
When helping a client with a loan modification where we are unable to collect an advance fee, we get concerned that even if we are successful in negotiating a great modification for the client, we might not get paid for our services because the client does not have the money available to pay us once the loan mod has been approved.
We are now seeing states that are starting to come out with new laws restricting advance fees. Florida and California for example have new laws that restrict advance fees charged by foreclosure consultants or foreclosure rescue consultants. The California law is already in place with further restrictions going into effect in 2009. The Florida law goes into effect on October 1, 2008.
The new Florida law has two main prohibitions that apply to most loan modifications.
You cannot engage in or initiate foreclosure related rescue services without first entering a written agreement with the homeowner.
You cannot charge or receive or even collect a fee for your loan modification services before completing or performing all services contained in your written agreement.
There’s still plenty of money to be made in the loan modification business. You just need to be alert to the changing laws that are being implemented that affect the loan mod industry.
To learn more tips about starting a loan modification business, download this.