Continuing his fight against scam artists who “prey” on vulnerable Californians, Attorney General Edmund G. Brown Jr. has issued a directive requiring “foreclosure consultants” to register with his office and post a $100,000 bond by July 1, 2009—or else. Those who fail to do so will be in violation of California state law and subject to criminal penalties of up to one year in prison and fines ranging from $1,000 to $25,000 per violation.

    Scam artists have fleeced thousands of homeowners desperate to save their homes by promising to prevent foreclosure or obtain loan modifications. Most charge money upfront, then either disappear, stop returning calls from the panicked homeowner or pretend to negotiate with the lender.

   Attorney General Brown is establishing a registry to provide Californians with both information about self-described foreclosure consultants and what homeowners can do if they feel they’ve been victimized. The registry was created after AB 180, legislation sponsored by Assembly-Speaker Karen Bass, was signed into law in 2008. Foreclosure consultants are further required to submit the following in addition to posting the $100,000 bond:

- Name, address, and telephone number;

- All names, addresses, telephone numbers, websites, and e-mail addresses used or proposed to 

   be used in connection with their business;

- Copies of all advertising;

- Copies of each different contract the consultant will use with consumers;

- A copy of his/her $100,000 bond.

   The office of the Attorney General may deny or revoke a Certificate of Registration if the foreclosure consultant has run afoul of foreclosure or mortgage laws in the past or has made misstatements on his/her registration form.

   Foreclosure Freedom is just one example of AG Brown’s prosecution of loan modification scam artists. In March 2009, he shut down this “fraudulent loan modification company” that continued to collect fees and mortgage payments from homeowners without ever providing the promised loan modification services. Two individuals were arrested and charged with 24 counts of grand theft and 25 counts of foreclosure consultant statute violations.

   In May 2009, Brown’s office obtained a guilty plea from Anna Santos, 22, who used forged documents to convince more than 100 desperate homeowners to pay her an average of $3,000 for non-existent loan modification services.

    If you are considering using a loan modification service, as them for three references, then call the references and ask for details.

    For more information, see the Attorney General’s website and notices of actions his office has taken: http://ag.ca.gov/newsalerts/.