Homeowners need to be leery of any “Foreclosure-rescue consultant” that charges upfront mortgage modification fees. According to Florida Statute 501.1377 only a few entities/organizations are legally entitled to collect upfront mortgage modification fees. So, if the homeowner is dealing with someone or entity that IS NOT an attorney, the existing lender, non-profit organization, HUD (Housing and Urban Development) organization they should NOT pay any upfront fee. A professional in the mortgage business, governed by Florida Statute 494 can charge an upfront application fee approximating up to $1,000.00, but they have to defer the mortgage modification fee until they have earned the fee. A mortgage professional has earned their fee when the mortgage holder has agreed to modify the loan (i.e. issued their commitment to modify the mortgage, etc.)
In the final analysis, if you are a mortgage professional in the State of Florida and you legally want to play in the game of mortgage modifications, you need to follow Florida Statute 501.1377 if the homeowner is in a foreclosure situation or Florida Statute 494 if the homeowner is seeking a lower loan payment or loan restructure through a mortgage modification. The reality of it is, once the lender has approved the modification, they typically send the modification documents to the homeowner who executes them before the mortgage professional becomes aware that even had been approved. At that point, the homeowner most likely obtained a satisfactory mortgage modification and has zero motivation to pay any additional fees, regardless the terms of the contract. Of course, the mortgage professional can file a claim and take the homeowner to court but who wants to deal with the time and cost associated with that.
Unfortunately, it appears as though the State of Florida is sending a clear message that they would prefer mortgage professionals stay in the business of originating loans and not working them out. After all, why would the State solicit the help from a group that contributed to the problem in the first place.
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