Whenever there are people are distress, the vultures start to circle.

Homeowners facing foreclosure, and looking desperately for help, are easy prey for unscrupulous foreclosure "experts" who care only about profiting from the misfortune of others. These homeowners with notices of default on a mortgage are targets for fraud, deception, harassment, and unfair dealings. Scammers may charge high fees or even secure payment by a deed of trust on the home in foreclosure, and then do nothing at all. Consequently, homeowners end up losing their homes and their equity.

California updated its foreclosure consultant law in 2008 to restrict the practice of charging upfront fees to assist a homeowner in pre-foreclosure. The law requires that a foreclosure consultant have a written contract with the homeowner and in many cases be bonded and registered with the California Department of Justice (as of 2009). Real estate licensees are usually exempt from the foreclosure consultant law, unless they are acquiring an interest in the property or loaning their own money and securing it by the property.

With the explosion of short sales in California, it's probably a good time to revisit the rules of negotiating.

So, how do you know if your business practices are regulated by the consultant law? Here is a summary of the guidelines:

Properties covered include:

• The owner occupies the property as a principal residence.
• The property is one to four family dwelling units.
• There is an outstanding notice of default recorded against the property.

The activities of a foreclosure consultant cover a broad range:

• Stopping or postponing the foreclosure sale.
• Obtaining a forbearance from a lender.
• Saving the owner's residence from foreclosure.
• Helping the owner obtain a loan or advance of funds.
• Avoiding or ameliorating the impairment of the owner's credit resulting from the notice of default or foreclosure sale.
• Assisting the owner in exercising the right to reinstate their loan.
• Obtaining an extension for the owner to reinstate his or her obligation.
• Obtaining a waiver of an acceleration clause contained in a mortgage loan secured by a residence in foreclosure.
• Assisting the owner in obtaining, from the lender or trustee under a power of sale, the remaining proceeds from the foreclosure sale of the owner's residence.
• Providing debt, budget, or financial counseling of any type.
• Giving any advice or explanation on curing a default, reinstating an obligation, fully satisfying an obligation, postponing a trustee's sale, or avoiding a trustee sale.
• Contacting creditors on the owner's behalf.
• Arranging or attempting to arrange for any delay or postponement of a foreclosure sale.
• Arranging or attempting to arrange for an extension for owner to cure a default and reinstate a loan.
• Receiving money to pay a creditor of any obligation secured by a lien on the residence in foreclosure.
• Advising on, or assisting in preparing, any document for filing with a bankruptcy court.
• Arranging or attempting to arrange for the payment by the lender or trustee under power of sale of the remaining proceeds of a foreclosure sale of the owner's residence, including instances where the owner transfers or assigns such right to the foreclosure consultant or the foreclosure consultant's designee.

So, pretty much anything to do with a short sale! The good news is, real estate licensees are generally exempt.

As long as Realtors avoid these four activities, they won't invoke the foreclosure consultant law:

• Direct Loan: Making a direct loan for a residence in foreclosure.
• Property Interest: Acquiring an interest in a residence in foreclosure.
• Advance Fee: Claiming or receiving any compensation before performing real estate services for a residence in foreclosure.
• Foreclosure Proceeds: Assisting an owner in obtaining the remaining proceeds if any from the foreclosure sale of an owner's residence.

Every Realtor and potential home seller should be aware of this law. Check out the summary here for specifics on the law:

http://ping.fm/2KUql

Agents, if you don't have experience and strong confidence to stand toe to toe with the banks, make sure you choose the right negotiator to help with you files. Your client's financial future depends on it. And so does your livelihood.

(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean Real Estate Professional
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com



I've been specially trained to negotiate short sales with an emphasis on deficiency waivers.

"If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula