The California Foreclosure Consultant Act

Do you have property in the state of California that is currently in foreclosure or is about to be foreclosed on? Did you know the state of California enacted a foreclosure consultant act? Did you know these provisions are included in the California Foreclosure Consultant Act?

If a Notice of Default has been entered against your home, the California Foreclosure Consultant Act forbids a foreclosure consultant or a licensed real estate professional from charging a up front fee of any kind for assisting a home owner work out a loan modification or other professional service to avoid foreclosure.

If a Notice of Default has not been recorded against your home it is permissible for a State of California licensed real estate broker to aid a home owner obtain a loan modification. Within this narrow frame work, the licensed real estate broker is allowed to ask for an advance payment, however, they must provide the home owner with a written contract which explicitly discuss and satisfy certain specific statutory requirements. The contract provided to the home owner by the licensed real estate broker must first be approved by the California Department of Real Estate.

The home owner has up to 5 business days to cancel any contract they have entered into and the right to specify the method of notice of cancellation.

Punitive damages are available to the home owner if they are injured, defrauded, or illegally deceived by the Foreclosure Consultant's contractual obligations and requirements. The damages include but are not limited to treble damages and attorney's fees. The act also set forth potential criminal penalties and fines available against the Foreclosure Consultant for any violations of the act.

The California Foreclosure Consultant Act forbid any Foreclosure Consultant from obtaining a power of attorney from a home owner for any purpose.

Foreclosure Consultants operating in the State of California must register with the Department of Justice and maintain a surety bond of $100,000.00.

California is experiencing the highest foreclosure rate than any other state in America. As a result, the homeowners there facing foreclosure are sometimes subject to unscrupulous pursuits and unfair dealings by foreclosure consultants. Because of this, the California legislature has enacted the California Foreclosure Consultant Act with the purpose of demanding that foreclosure consultant's service agreements include, in writing, safeguards against deceptive practices, and sections which permit the homeowner to cancel the agreement, to encourage fair dealing, and prohibit representations that tend to mislead, defraud, and injure the home owner in any way.

If your property is in foreclosure or about to be added to the roll and you are approached by someone who offers to assist you workout a loan modification, remember this act, and do your homework.

Resource: California Foreclosure Consultant Act - California Civil Code Section 2945