Thursday, July 19 , 2018, 3:18 pm | Fair 76º


Nava Legislation Targets Loan Modification Scams

His Homeowner Fraud Prevention Act passes the Senate Banking, Finance and Insurance Committee

Assemblyman Pedro Nava, D-Santa Barbara, targeting loan modification foreclosure crooks, announced Monday that his landmark financial and banking legislation has passed the Senate Banking, Finance and Insurance Committee.

“Homeowners in foreclosure are desperate and vulnerable. Predators feed on that fear and rob them of the little money they have,” Nava said. “There is an epidemic of foreclosure scams and criminals who prey on homeowners in trouble. Don’t pay anyone an advance fee to renegotiate your home loan.”

California homeowners are being bombarded with offers to modify existing home loans. These scams charge homeowners thousands of dollars for a service that should be free. In many cases, homeowners pay the exorbitant fees and then receive no modification at all.

The Homeowner Fraud Prevention Act would ban the collection of all advance fees for modifying a loan. It would ensure that homeowners receive a modification before paying. Violations of the act would be subject to a fine of $20,000 for an individual and $60,000 for a corporation and up to one year in county jail. Assembly Bill 764 also would ban false and misleading advertising by individuals and companies that offer loan modification services.

“Loan modification scams have only grown worse in the wake of ongoing foreclosures, and they are an outgrowth of the failure of financial institutions in responding adequately to borrowers trying to save their homes. If the banks were doing their jobs in modifying loans — with the billions of dollars we gave them — then homeowners wouldn’t fall prey to so many scams,” said Kevin Stein, associate director of California Reinvestment Coalition. “AB 764 gets to the strong solutions we need to protect homeowners and crack down on for-profit, predatory loan modification consultants.”

— John Mann is a spokesman for Assemblyman Pedro Nava, D-Santa Barbara.


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