Loan Mod Compliance – The Basics You Need to know

If you are doing loan modifications in multiple states, you need to be aware of a few important rules.

First, you may be required to get a license. In some cases, this will be a mortgage broker or lenders license.  In other cases, the license could be a debt adjuster’s license (New Jersey for example).

Second: You more than likely are required to have a written agreement with your consumer that describes the services you will provide and which also describes how much you will be paid for your services and when such payments are due.

Third: Your contract may also be required to contain a rescission clause with specific state required language that tells the consumer that they can cancel the contract within a specified time period without incurring any cost whatsoever.

Fourth: The state’s law may prohibit the collection of an advance fee prior to completion of all of the services listed in your contract. This means no advance fee can be collected until the loan modification is completed and the client received the services that he or she bargained for.

So there’s a right way to do this. Knowledge is power. Good luck ….


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