News ReleaseJune 01, 2009For Immediate ReleaseContact: (916) 324-5500
Brown Directs Foreclosure Consultants to Register with his Office and Post $100,000 Bond
Oakland — Continuing his fight against scam artists who “prey on” vulnerable Californians, Attorney General Edmund G. Brown Jr. today issued a directive forcing foreclosure consultants to register with his office and post a $100,000 bond by July 1, 2009.
Those who fail to do so will be in violation of state law, subject to criminal penalties of up to a year in jail and fines ranging from $1,000 to $25,000 per violation.
“California is awash with con artists who prey on vulnerable families facing foreclosure,” Brown said. “By forcing foreclosure consultants to submit detailed information to my office and post a $100,000 bond, this registry will help bring long-overdue transparency to this shadowy world.”
Up and down the state, scam artists pose as legitimate foreclosure consultants, promising homeowners they will prevent foreclosure. In reality, these scam artists charge huge up-front costs, but don’t provide an ounce of help.
Earlier this month, Brown’s office prosecuted a scam artist who provided hundreds of homeowners with forged bank documents and directed them to send their mortgage payments to accounts she had created, instead of the homeowners’ lender.
Additionally, Brown’s office has seen a significant increase in the number of complaints from homeowners regarding foreclosure consultants.
The registry unveiled today will provide Californians with information about potential consultants and recourse in the event that a consultant violates the law.
All foreclosure consultants operating in California must post a $100,000 bond and register with Brown’s office by July 1, 2009 and submit the following information:
– 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; and
– A copy of its $100,000 bond.
Foreclosure consultants who provide proper information will receive a Certificate of Registration. Brown’s office, however, may refuse to issue, or revoke, a Certificate of Registration if the foreclosure consultant has made any misstatement in its registration form, has been convicted of fraud or misrepresentation, has been convicted of a violation of the state’s foreclosure consultant laws, California’s false advertising, unfair or deceptive practices laws or other laws dealing with mortgages.
If the company violates the law, a court may order restitution to victims out of proceeds from the $100,000 bond.
In order to obtain a Certificate of Registration by July 1, 2009, foreclosure consultants should send in their registration application and materials as soon as possible so they can be reviewed prior to July 1.
The registry was established through legislation sponsored by Speaker of the Assembly Karen Bass, AB 180, which was signed into law last year.
A copy of the registration forms may be found at http://ag.ca.gov/register.php under the “Foreclosure Consultant Registry.”
After July 1, 2009, consumers can call the Attorney General’s office to determine whether the company they are considering dealing with has been issued a Certificate of Registration.