California AG: Foreclosure Consultants Must Post $100K Bond, Register

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By Admin on June 02, 2009 11:10 AM

Californians will get enhanced protection from foreclosure rescue scammers under a new plan from state Attorney General Jerry Brown, which will require foreclosure consultation companies to register with the AG's office and post a $100,000 bond by July 1st if they want to stay in business.

The plan will create a registry of foreclosure consultants operating in the state, which will allow consumers to research companies before they seek their services, and will also open up a paper trail for recourse if the company violates the law. All foreclosure consultants operating in the state must post a $100,000 bond with Brown's office by July 1, and provide company information -- including copies of contracts that will be offered to consumers, and examples of advertising. In exchange, the foreclosure consultants will receive a Certificate of Registration, according to the California AG's office.

Foreclosure "rescuers" who try to stay in business without fulfilling the new registration requirements will face criminal penalties, including up to a year in jail, and fines from $1,000 to $25,000 for each violation.

This week's action from California's top cop is the latest government enforcement move meant to protect cash-strapped homeowners from scammers looking to capitalize on the housing market crisis. In April, the federal government announced a nationwide crackdown on the skyrocketing amount of predatory companies making "Foreclosure Relief Now!" and "Save Your Home!" promises they can't (or won't) keep.

Homeowners who may be in danger of foreclosure should thoroughly research their assistance options and watch out for companies that offer to pay off or take over a mortgage, and demand high fees to reduce mortgage obligations down to incredibly (read: impossibly) low monthly payments. Learn more about Foreclosure Assistance Provided by HUD.gov and how to Watch out for Foreclosure Scams.