DRE Responds to Loan Mod Scams

The California Department of Real Estate has been pretty busy lately protecting the public's interests by going after licencees who are participating in fraudulent loan modification services. This year the amount of licenced Real Estate Agents who have had their licenses revoked has grown by 50% and there has been an 80% rise of people who have voluntarily surrendered their licenses while facing accusations.

To date, the California Department of Real Estate reports over 775 licensees had their license revoked or simply surrendered their licenses while facing accusations. The downturn in the real estate market is a big reason disciplinary actions are up.

"With so many people struggling to stay in their homes, foreclosure rescue and loan modification scams have risen dramatically," DRE Commissioner Jeff Davi says.

"And what is even more unsettling, a majority of offenders involved in loan modification scams are not even licensed, which limits a consumer's ability to obtain restitution or verify the legitimacy of a business."

In 2009 alone there have been 2,000 investigations in California involving loan modifications. That's huge!

So here is my cautionary tale... first and foremost if you are looking into a loan modification, please beware of companies who are asking for a significant financial investment up front - there is no guarantee that your money will get you a modification. Two, check to see if the individual has a Real Estate License - no license, less ability to prosecute later should something go wrong. And three, check on the DRE website where "Cease and Desist" orders are published to verify no complaints have been filed.

Here is the link for the California Department of Real Estate. The quick link to check on a sales person's license if found here. For the full article from The Real Estate Channel click here.