On October 11, Governor Schwarzenegger signed into law Senate Bill 94, which immediately makes it unlawful for any licensed attorney or real estate agent "who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower...to claim, demand, charge, collect, or receive any compensation until after the [attorney or agent] has fully performed each and every service the licensee contracted to perform or represented that he, she, or it would perform. For further information click on this LINK
Personally, I am very happy about this new law. Especially where it concerns real estate agents. Consider the huge conflict of interest presented by taking advice to save your home from an agent who gets paid for selling homes. How hard will that agent try to help you, exactly? I have tried to help my clients do modifications, but only for free. If the lender refuses, which is unfortunately more common than not, then I might try to help my client with a Short Sale. But Short Sales have such a low chance of success lately that I still usually end up working for free. I don't like working for free all that much, but I try to help my clients in ways beneficial to them, not me.
Please help spread the word about this law.
People have been getting screwed over by loan modification "services." I would never advocate violence, but this article in the LA Times does not surprise me. It was perhaps inevitable.