There is both California state law as well as a federal law from the Federal Trade Commission (FTC), governing firms helping consumers who require foreclosure prevention assistance. CDA Law Center has worked with both the California Senate and the FTC while they considered and drafted the legislation discussed on this page. In 2010, CDA attended an official extended education class for attorneys offered by the Orange County BAR Association on loan modification practices, in which all three BAR panelists reaffirmed the way in which we collect fees under SB-94. Further, our current Loan Modification Retainer Agreement was reviewed by the California State Bar and found to be in compliance with SB-94  requirements. CDA Law Center is a private California law firm in good standing with the California State Bar, and is not affiliated with any Government Agency, Lender, Servicer, or Debt Collector. For consumers who cannot afford to hire an attorney, there are free services such as HUD counsellors who can assist you. Do not hesitate to ask us for more information on free assistance.

CALIFORNIA LAW
California loan modification companies must be compliant with CA SB-94. This bill, which became enforceable on October 12th 2009, regulates the way attorneys are allowed to obtain clients and structure fees. According to statements by Senator Caulderon’s office, the author of SB-94 and Chairman of the Senate Banking Committee, as well as Governor Schwarzenegger who signed it into law, SB-94 was intended to disallow Mortgage Brokers and Realtors (Foreclosure Consultants) from charging advanced fees to consumers thereby eliminating most of the scams that were prevalent when this law was passed. The Governor stated that he did not intend to eliminate the right of a borrower to hire an attorney to fight the banks who have hundreds of attorneys themselves, thus passing SB-94 and killing AB-764.

Many people, including the BBB and journalists confuse SB-94 with AB 764, or do not understand the differences between a Foreclosure Consultant and an Attorney. AB 764 prevented anyone from collecting fees until a loan modification was obtained. This bill was purposely not signed into law. AB 764 was not signed because the government did not want to prevent a struggling borrower from retaining the services of an attorney.  Due Process and the right to legal representation is the cornerstone of our Constitution.  SB-94 Specifically allows Attorneys to break up the work related to seeking foreclosure assistance into separate contracts with fees assigned to each contracted body of work. All services contained within that contract must be completed prior to collecting those fees.

Pursuant to SB 94 and FTC guidelines, CDA Law Center does not collect advanced fees. Remember, when hiring an Attorney, you are paying for his efforts and work product, and not for any particular outcome. The outcome of any negotiation is uncertain. We fully disclose the risks and potential outcomes involved with attempting to obtain a loan modification.  We believe it is important that you understand the possible outcomes and maintain realistic expectations about your case .  CDA Law Center does not “sell” loan modifications. We offer legal services related to helping our clients obtain a loan modification. It is unethical for a firm to claim or guarantee otherwise, and would likely be misrepresenting their services.  Please ask us if you require further clarification on these matters.

CDA Law Center has reported non-compliant firms to the California AG’s foreclosure fraud task force. As stated, we are happy to forward any company to them that you feel may be out of compliance. This would include any non-law firm offering Forensic Loan Audits which are now banned by Federal Regulation. For more information about SB 94, read SB-94, WHAT IS REALLY SAYS

FEDERAL LAW
On January 31st, 2010, the Federal Trade Commission began enforcement of the FTC “Final Rule” covering rules of foreclosure in all 50 states. The FTC announced the new rule here: FTC ISSUES FINAL RULE .
This new rule impacts providers of mortgage foreclosure rescue and loan modification services (MARS Providers) in all 50 states. The Final Rule prevents any non-attorney from charging fees for any foreclosure prevention related services, including Forensic Loan Audits, until a loan modification is obtained. To quote the FTC website: “Attorney exemption: Attorneys are generally exempt from the rule if they meet three conditions: they are engaged in the practice of law, they are licensed in the state where the consumer or the dwelling is located, and they are complying with state laws and regulations governing attorney conduct related to the rule. To be exempt from the advance fee ban, attorneys must meet a fourth requirement – they must place any fees they collect in a client trust account and abide by state laws and regulations covering such accounts” (See SB-94 requirements listed above).

If you are being contacted by a non-attorney or if you live in California and are speaking to an out-of-state firm who is trying to collect fees for foreclosure prevention after January 31, 2011, please report them to the FTC.

CDA Law Center works diligently to adhere to every state and federal law governing the services we provide, and we are on the forefront of this in providing input to lawmakers in this field of practice.