Loan Modification Warnings

Los Angeles (myFOXla.com) - With so many homeowners facing foreclosure, "loan modification" companies promising financial lifelines sound great. Watch out, though... some customers say they're not getting they're not getting their money's worth after putting down big money up front.

John Schwada has the FOX 11 Investigation in this video report.

More Information:

Here are some resources to learn more about loan modification:

• The California Dept. of Real Estate phone numbers for consumer services: Sacramento (916) 227-0864 Los Angeles (213) 620-2072.
   
• The California Dept. of Real Estate (DRE) website, www.dre.ca.gov/mlb_adv_fees_list.html , lists the loan modification firms that have received DRE approval to use advance fee contracts. However, the list does not identify when a specific firm received such approval.
  
  Obtaining that information requires contacting the DRE. According to the DRE, it is a violation for a loan modification company to charge advance fees if it has not first received DRE approval of its contract.
  
  The CEO of The Firm, Nick Ayyoub, claims the DRE only notified real estate brokers engaged in the loan modification business in late October, 2008 of the need to have their advance fee contracts approved by the agency (DRE); Ayyoub also claims his company has hundreds of satisfied customers.
   
• Attorney Robert Starr, Woodland Hills, at (818) 225-9040 has asked court permission to file a class action lawsuit against The Firm, a loan modification company with offices in Rancho Cucamonga and Anaheim, claiming the company has violated the state's advance fee contract law.
   
• Arce Legal Services, Rancho Cucamonga, at (909) 489-0190 is in contact with several Inland Empire attorneys who are considering class action lawsuits against loan modification companies.
   
• Attorney John Habashy, Beverly Hills, at (800) 825-1109 is also considering a class action lawsuit against loan modification firms.