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12/29/09

California Department of Real Estate Stops Loan Scammers

Over the past year the California Department of Real Estate has dramatically increased its investigations into loan modification scam companies.  In July 2008, the DRE had fewer than 10 complaints, now there are over 1300 pending investigations.  Additionally, the department has fielded over 440 Desist and Refrain Orders and accusations involving loan modification scams. 

A recent example of the DRE's increased actions against scammers is the revocation of Whitfield Financial Services Inc.'s real estate license for failing to properly handle trust funds and illegally collecting advance fees in connection with loan modification services.  California law expressly prohibits any individual, attorney, or real estate licensee from collecting upfront fees for loan modification services.  

 "With so many people struggling to stay in their homes, foreclosure rescue and loan modification scams have risen dramatically," DRE Commissioner Jeff Davi said. "While enforcement efforts are important and we encourage victims to file complaints, consumer education is the key to keep consumers from falling prey to unscrupulous companies. There is no reason a consumer should pay an upfront fee for loan modification services."

Visit the DRE website for a full list of actions against scammers.

For more information read the DRE's press release.