Diane C. Lade, South Florida Sun Sentinel
State regulators took the first step Thursday in what they said will be an ongoing effort against unlawful mortgage modifiers, ordering several South Florida operations to immediately stop doing business.
The Florida Office of Financial Regulation cited five companies Thursday morning: Foreclosure Solution Specialists Inc., of Tamarac; the Federal Housing Assistance Program, west of Fort Lauderdale; Liberty Home Solutions, of West Palm Beach; Keep Living in Your Home, of Boca Raton; and Saving Your Home, of Miami.
They were alleged to have violated two state laws by taking money upfront for mortgage modifications and by not being licensed to perform those services.
Sharon Dawes, an area financial manager with Financial Regulation in Broward County, said this sweep will be the first of many, as the department looks to ensure foreclosure rescue operations follow the new licensure law.
As of Jan 1, loan modifiers, loan originators and mortgage lenders were required to have a state mortgage broker’s license. Previously, modifiers were largely unregulated.
Upfront fees have been prohibited, in most cases, for almost a year under a 2008 law.
Last year, legislators narrowed an earlier exemption given to attorneys, allowing advance fees only when they handle modifications in relation to an existing case, like a bankruptcy.
Dawes said the state sent out about 1,000 letters to mortgage companies statewide late last year, notifying them of the licensure change.
State officials started following up with visits to their offices in January, Dawes said.
Officials will go back to the ones they said still aren’t in line with the regulations, Dawes said. Those companies will be ordered to stop doing business until they are in compliance, Dawes said.
http://www.sun-sentinel.com/business/fl-loan-modification-sting-0219-20100218,0,6835319,full.story
